Zero Tax (0% GST)
Individual life and health insurance policies, including family floaters and senior citizen plans Indiatimes+15India Today+15The Financial Express+15.
Ultra‑high temperature (UHT) milk, packaged or labeled paneer, and all Indian breads—including roti, paratha, etc. The Times of India+4mint+4Press Information Bureau+4.
Life-saving and critical medicines (33 kinds), especially for cancer and rare diseases—GST dropped from 12% or 5% to NIL Press Information Bureau+2Hindustan Times+2.
Educational supplies, including pencils, crayons, notebooks, erasers Press Information Bureau+1.
5% GST Slab
Daily essentials: hair oil, soap bars, shampoo, toothpaste, shaving cream, butter, ghee, namkeens, chocolates, instant noodles, sauces, pasta, coffee, preserved meats, cornflakes Press Information Bureau+2Hindustan Times+2.
Household goods: bicycles, tableware, kitchenware, other daily-use articles Press Information Bureau+1.
Medical devices: bandages, diagnostic kits, glucometers, thermometers, etc. Press Information Bureau+2Hindustan Times+2.
Agricultural equipment & supplies: tractors, tractor parts, machinery for cultivation and harvesting, fertilisers, drip‑irrigation gear Press Information Bureaumint.
Beauty & wellness services: salons, gyms, spas, yoga centres, etc. Press Information Bureau+1.
18% GST Slab (Previously 28%)
Air conditioners, TVs (all sizes), monitors, dishwashers Hindustan Times+1.
Small cars (petrol ≤1200 cc or diesel ≤1500 cc; length ≤4 m) Hindustan Times+2Hindustan Times+2.
Motorcycles up to 350 cc, commercial vehicles like three-wheelers, buses, trucks, ambulances, and all auto parts The Times of India+5Hindustan Times+5Press Information Bureau+5.
Cement—tax trimmed down to 18% The Financial Express+15Press Information Bureau+15Reuters+15.
Luxury & sin goods now face 40% GST: includes mid‑ to large‑sized cars (beyond small car specifications), motorcycles over 350 cc, personal aircraft, yachts, tobacco products like pan masala, gutkha, bidis, and aerated/sugary/caffeinated beverages Indiatimes+5Hindustan Times+5mint+5.
Common households: Lower costs on essentials—food, personal care, and hygiene products ease everyday budgeting The Times of India+6The Hans India+6The Economic Times+6.
Working professionals & students: Exempted insurance and educational items reduce financial load.
Healthcare sector: More affordable medicines and devices could improve access.
Agriculture & rural entrepreneurs: Dropped GST on farm machinery and fertiliser supports productivity.
Manufacturing and auto sectors: Lower tax on auto components, small cars, and appliances promises demand stimulation and supply chain benefit Reuters+1.
Economy at large: Enhanced consumption may reduce inflation by up to 1.1 percentage points and boost GDP growth over upcoming quarters Reuters+1.
Luxury goods firms: Higher GST on premium products and sin goods will likely constrain demand for high-end vehicles and indulgences.
| Benefit/Pain Point | Items Affected | Beneficiaries |
|---|---|---|
| Cheaper (0–5%) | Essentials, insurance, medicines, farm items | Common man, rural sector, healthcare |
| Moderately Cheaper (18%) | Small cars, appliances, personal transport | Middle-class, manufacturers, auto sector |
| Costlier (40%) | Luxury and sin goods | Government revenue; may curb demand |
Set a friend‑to‑friend tone—clear, empathetic, and insightful, as befitting KNAP Advisory's expert yet accessible style:
Use headlines like "A Historic Tax Adjustment: What You’ll Pay Less For…" and "Watch Out: Some High-End Products Will Cost More."
Emphasize how the reform balances consumer relief with strategic revenue shifts.
Highlight the timing—just ahead of the festive season—as a well-timed “Diwali bonanza” aimed at reviving demand www.ndtv.com+8Hindustan Times+8Reuters+8www.ndtv.com+2mint+2The Economic Times+15mint+15Hindustan Times+15Press Information Bureau+12Reuters+12mint+12The Economic Times+1The Hans India+2The Times of India+2Moneycontrol+12Hindustan Times+12Indiatimes+12The Economic Times.
Close with reassurance: "KNAP Advisory remains committed to guiding businesses and individuals through these changes. Get in touch for personalized compliance support and strategic tax planning as these new rates roll out on September 22, 2025."
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We have been especially crucial in ensuring startups are compliant with India's complex legal structure. We accept responsibility and obligation on behalf of the business owners and co-founders for adhering to all legal requirements. We strive to deliver a wide range of quick, effective, and compliance-focused services to any company or individual with a startup mentality. We are abide by our motto:- We Care, We Deliver, We Honor.
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