The goods and services tax (GST) council has announced sweeping changes to the GST, restructuring slab rates across multiple categories of goods and services. The move, effective 22 September 2025, is being described as one of the most significant overhauls of the GST framework since its rollout in 2017. While the revisions span a wide spectrum — from consumer durables and lifestyle products to services such as hospitality and logistics — the most immediate relief will be felt by households, thanks to substantial cuts in tax rates on daily essentials.
Everyday items that are part of household budgets are set to become more affordable. Personal-care products, such as hair oil, shampoo, toothpaste, toilet soap, toothbrushes and shaving cream, which were previously taxed at 18%, will now attract a GST of just 5%. For families, this marks a considerable reduction in routine expenses, given the widespread use of these products.
Dairy and packaged food products, which were subject to varied interpretations under earlier notifications, have been clarified and aligned to a lower slab to avoid confusion for businesses and consumers. Butter, ghee, cheese and dairy spreads, all commonly used in Indian kitchens, have been moved from the 12% slab to 5%. Pre-packaged namkeens, bhujia and mixtures, which were also taxed at 12%, will now attract 5% GST, making popular snack foods more affordable. Officials have stressed that these cuts are expected to directly ease kitchen expenses and support household budgets.
Until now, all types of milk except ultra-high temperature (UHT) milk have been exempt from GST. To further simplify the tax structure, UHT milk has now been brought under the exemption category as well. This will make packaged UHT milk more affordable, especially for consumers in urban areas who rely on it for its longer shelf life.
In addition, plant-based milk drinks (other than soya milk) earlier attracted 18% GST, while soya milk was taxed at 12%. Under the new regime, all such milk alternatives have been brought down to a uniform 5% GST. This move is expected to benefit the growing segment of health-conscious and lactose-intolerant consumers who are turning to almond, oat and soy-based milk products which, until now, were considered premium due to high taxes.
Similarly, while regular breads were already exempt, variants such as pizza bread, roti, parotta, and paratha were taxed at different rates. The revised changes have streamlined this by exempting all Indian breads, irrespective of the name or type, from GST. This uniform treatment will not only reduce confusion for bakeries, restaurants and small food businesses but also ensure that consumers are not paying different prices for essentially similar food items.
In the case of footwear and apparel, the earlier threshold for the 5% GST rate was Rs1,000, with items priced above this charged at 12%. Now, the threshold has been raised—footwear and apparel priced up to Rs2,500 will attract only 5% GST. This revision is likely to make budget-friendly clothing and footwear more accessible to middle-class households. However, the rate for items priced above this limit has also been increased from 12% to 18% which could make higher-end brands and luxury categories more expensive. While this balances revenue considerations for the government, it could pinch consumers in the premium retail segment.
The benefits extend to utility and childcare items as well. Utensils, previously taxed at 12%, will now fall under the 5% bracket. Feeding bottles, napkins for babies and clinical diapers have also seen their GST rates halved, from 12% to 5%. Even sewing machines and their spare parts—used by households and small businesses alike—will now attract 5% GST, down from 12%.
Another notable clarification relates to local delivery services. Traditional courier and postal services were already taxed at 18% GST and that rate remains unchanged. What has now been added is that deliveries carried out through electronic commerce operators (ECOs)—such as app-based platforms and gig-economy delivery services—will also attract 18% GST. Under the revised framework, if a small or unregistered delivery agent provides services through a platform, the responsibility to collect and pay GST will fall on the platform itself. This move brings doorstep delivery apps under the same tax treatment as courier companies, ensuring uniformity but also meaning that consumers may continue to see an 18% GST component in their delivery charges.
The government has framed these measures as part of a broader agenda to improve the ease of living for ordinary citizens. In its official communication, it said the reforms are designed to ‘bring happiness for all — from farmers to enterprises, from households to businesses’.
Prime minister (PM) Narendra Modi called the GST overhaul “a gift for every Indian this Diwali,” adding that the cuts would ensure that “everyday items will become cheaper and this will also give a new boost to the economy.”
The reforms are not limited to daily essentials but extend across agriculture, healthcare, education, electronics and automobiles. However, the biggest impact will likely be felt in household consumption, where even modest reductions can potentially translate into significant monthly savings.
For households, the changes mean lower prices on a wide range of everyday goods—from the toiletries on their shelves to the staples in their kitchens. Families with young children will see relief on baby-care products, while households that rely on domestic sewing or tailoring will benefit from cheaper sewing machines and parts. Retailers are expected to pass on the tax savings to customers, though consumer groups will be watching closely to ensure compliance.
With inflationary pressures still a concern, the cuts in GST on essentials are likely to be welcomed by families across income groups. The government, in turn, is positioning this as a reform that delivers both immediate consumer relief and long-term economic benefits.
As the new rates come into effect from 22nd September, households can look forward to a noticeable dip in the cost of everyday essentials—just in time for the festive season.
GST Rate Changes for Daily Essentials (Effective 22 Sept 2025)
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