Taxation
NEXT GEN-GST REFORMS! What are the major changes made in GST 2.0 in 2025?
| Category / Examples | Old GST | New GST | Notes |
|---|---|---|---|
| Consumer durables – air-conditioners, dishwashers, TVs (LCD/LED) | 28% | 18% | Rate rationalisation for electronics. |
| Cement | 28% | 18% | Relief for housing & infra. |
| Small cars (≤1200cc petrol/LPG/CNG ≤4000 mm; ≤1500cc diesel ≤4000 mm) | 28% | 18% | Relief for middle class |
| Motorcycles ≤350 cc | 28% | 18% | >350 cc moved to 40%. |
| Three-wheelers (HSN 8703) | 28% | 18% | Support to e-ricksaw and tractors |
| Buses (HSN 8702), trucks (HSN 8704), ambulances | 28% | 18% | Public transport, cargo movement and health care benefitted |
| Luxury vehicles (mid/large cars, SUVs per ground-clearance rule), motorcycles >350 cc | 28% (+cess earlier) | 40% | 40% applied without cess. Luxury goods would become cheaper! |
| Personal aircraft, yachts, pleasure vessels | 28% | 40% | To be costly |
| Agricultural machinery (sprinklers, drip, harvesters, threshers, etc.) | 12% | 5% | cheaper |
| Renewable-energy devices & parts (solar, wind, tidal, etc.) | 12% | 5% | Support to green economy |
| Medicines (general) | 12%/18%/5% (mixed) | 5% (nil for specified life-saving) | Unified concessional rate; list of nil-rated life-saving drugs expanded. |
| Medical devices/equipment (apparatus, diagnostic kits, glucometers, etc.) | 12%/18% | 5% | Health care supported |
| Man-made fibres, yarns & specified textiles | 12%/18% | 5% | Inversion correction. |
| Everyday FMCG (hair oil, soaps, shampoos, toothbrushes/paste, tableware, kitchenware, bicycles) | 12%/18% | 5% | “Essentials for the common man.” |
| Indian breads (khakhra, roti/chapati, paratha/parotta, pizza bread, etc.) | 5% / 18% | Nil | Full exemption for “Indian breads”. |
| Namkeens/bhujia/mixtures (pre-packaged & labelled) | 12% | 5% | FMCG boost |
| Cocoa products & chocolates (specified) | 18% | 5% | Happy Children |
| Other non-alcoholic beverages | 18% | 40% | Aerated & caffeinated beverages move to de-merit band. |
| UHT milk; pre-packaged & labelled chhena/paneer | Taxed earlier (UHT); paneer often taxed when pre-packaged | Nil | UHT milk exemption added; paneer clarified. |
| Service | Old GST | New GST | Notes |
|---|---|---|---|
| Individual health insurance premiums (incl. family floaters & senior-citizen policies) | 18% | Nil | Exempted. |
| Individual life insurance premiums (term/ULIP/endowment) | 18% | Nil | Exempted. |
| Air passenger transport – non-economy (premium economy/business/first) | 12% | 18% | Economy remains 5%. |
| Admission to casinos/race clubs; betting/online gaming/lottery | 28% | 40% | Shifted to 40% de-merit slab. |
| Leasing/rental of goods (without operator) | 28% | 40% | |
| Composite works contract (specified) | 12% | 18% | |
| Third-party insurance for goods carriages | 12% | 5% (with ITC) | |
| Rail container transport; multimodal/GTA nuances | 12% → 5% (no ITC) / 18% (with ITC) | Structure simplified | As per mode/ITC conditions. |
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