New Delhi/Chandigarh, September 21: From Monday, consumers will see lower prices on a wide range of goods and services as revised Goods and Services Tax (GST) rates on nearly 375 items take effect. The changes, announced by the GST Council earlier this month, will be implemented from September 22 — coinciding with the first day of Navratri.
The new structure will bring down rates on essentials, fast-moving consumer goods (FMCG), automobiles, medicines, electronics and personal care products. Finance Minister Nirmala Sitharaman said the decision is expected to “leave people with more money in hand that otherwise would have gone as taxes,” estimating an infusion of nearly ₹2 lakh crore into the economy.
Everyday kitchen items such as ghee, butter, paneer, namkeen, ketchup, jam, dry fruits, coffee and ice creams will be cheaper, while aspirational products like televisions, air conditioners and washing machines will also see price drops. Several FMCG companies have already confirmed they will revise their product prices to pass on the benefit of lower taxes to consumers.
Medicines and medical equipment, including diagnostic kits and glucometers, will now fall under the 5 per cent slab, down from 12 or 18 per cent. Pharmacies have been directed to revise maximum retail prices or sell medicines at reduced rates. “The cost of essential drugs will come down for the common man,” an official noted. Cement, widely used in housing and infrastructure, will also get cheaper with tax cut to 18 per cent from the earlier 28 per cent.
The auto sector will be among the biggest gainers, with GST on small cars slashed to 18 per cent and on larger vehicles to 28 per cent. Multiple carmakers have already announced price reductions across models. “This is a significant relief for the industry as well as buyers,” said an executive from a leading automobile company.
Personal care and wellness services are also set to become more affordable. Tax on services provided by salons, beauty centres, gyms, yoga studios and health clubs has been cut from 18 per cent with input tax credit to 5 per cent without credit. Daily use products including hair oils, soaps, shampoos, toothpaste and toothbrushes will now attract just 5 per cent tax, down from 12 to 18 per cent. Similarly, items like shaving creams, talcum powders and after-shave lotions will also move to the lower 5 per cent bracket.
Under the revised structure, GST will largely operate in two tiers — 5 per cent and 18 per cent — while ultra-luxury goods will attract a 40 per cent levy, and tobacco products will continue to fall under the 28 per cent slab with cess. Nearly 99 per cent of items under the 12 per cent slab will shift to 5 per cent, while about 90 per cent of goods currently taxed at 28 per cent will move to the 18 per cent bracket.
“This reform is a bonanza for consumers and will help stimulate demand,” Sitharaman said, adding that the reduction is designed to boost spending power during the festive season.
