The most recent GST changes in India, approved in the 56th GST Council Meeting (September 2025), introduced significant industry-wise rate revisions and structural reforms. Changes take effect from 22nd September 2025 for most sectors, and the sector-wise rate changes are substantial across insurance, FMCG, healthcare, automobiles, construction, agriculture, textiles, hospitality, consumer electronics, paper, job work, and more.
Key highlights include:
Insurance
- Individual life and health insurance policies are now exempt from GST
FMCG and Daily Essentials
- Goods like hair oil, soaps, shampoos, toothbrushes, toothpaste, bicycles: GST reduced from 18%/12% to 5%.
- Packaged foods including paneer, breads, namkeens, chocolates, coffee: Reduced to 5% or NIL.
- UHT milk, Indian breads (chapati, paratha, parotta): NIL GST.
Healthcare and Medicines
- 33 lifesaving medicines: GST reduced from 12% to NIL.
- Cancer/rare disease drugs: Reduced from 5% to NIL.
- All other medicines: Reduced from 12% to 5%.
- Medical devices/equipment: 18%/12% to 5%.
Automobiles and Parts
- Small cars, motorcycles (≤350cc), buses, trucks, ambulances: 28% to 18%.
- All auto parts now at 18%.
- Three-wheelers: 28% to 18%.
Construction Materials
- Cement: 28% to 18%.
Agriculture
- Tractors, agricultural & horticultural machinery: 12% to 5%.
- Handicrafts and intermediate leather goods: 12% to 5%.
Textiles
- Manmade fibre: 18% to 5%.
- Manmade yarn: 12% to 5%.
Fertilizer Sector
- Essential inputs (sulphuric acid, nitric acid, ammonia): 18% to 5%.
- Bio-pesticides and select micronutrients: 12% to 5%.
Renewable Energy
- Devices and parts: 12% to 5%.
Hospitality Services
- Hotel accommodation (≤₹7,500/day): 12% to 5%.
- Beauty/wellness (gyms, salons, barbers, yoga): 18% to 5%.
Consumer Electronics
- Air-conditioners, dish-washing machines, TVs (LCD, LED), monitors: 28% to 18%.
Paper Sector
- Exercise books, notebooks: 12% to NIL or 5%.
- Wood pulp, paperboard inputs: 12% to 5%.
Job Work Sector
- GST for most job-work services cut from 12% to 5%.
Other Highlights
- A new 2-rate GST structure: 18% (standard), 5% (merit), and a 40% de-merit rate for select goods/services.
- Tobacco, pan masala, aerated/caffeinated/fruit-based beverages now taxed at the new de-merit rate (40%).
- Eased compliance norms for small businesses, exporters, and e-commerce suppliers.
- GST exemptions and reduced rates for common-man items (toothbrushes, soaps, candles, sports goods, etc.).
- Taxes on some “luxury” and “sin” goods, such as casinos, race clubs, and certain vehicles, increased to 40%.
Summary Table of Notable Sector Changes:
Industry | Previous GST | New GST | Notes |
Insurance | 18% | Exempt | All life/health Policies |
FMCG – Essentials | 12-18% | 5% | Hair oil, soap, basics |
Healthcare (Lifesaving) | 12 % | Nil | Select 33 medicine |
Small Automobiles | 28% | 18% | Cars, motorcycles |
Cement | 28% | 18% | Construction input |
Agricultural Machinery | 12% | 5% | Tractors, horticulture |
Manmade Fibre | 18% | 5% | Textiles sector |
Fertilizer Inputs | 18% | 5% | Sulphuric acid, ammonia |
Renewable Energy | 12% | 5% | Devices, components |
Hotel Rooms | 12% | 5% | Per day ≤₹7,500 |
Consumer Electronics | 28% | 18% | AC, TV, Dishwashers |
These rates and reforms are expected to stimulate broad-based economic growth, reduce consumer costs, and simplify compliance across major sectors.