GST Rate Changes 2025: Complete Category-Wise Guide (Old vs New Slabs)
India is witnessing the biggest GST overhaul since 2017. In its 53rd GST Council meeting (September 2025), the government approved a massive rate rationalisation aimed at making GST simpler and boosting sectors like defence, FMCG, textiles, and electronics.
This article provides a detailed comparison of old vs new GST rates (category-wise), explains the impact on businesses and consumers, and highlights the special GST concessions for defence and aerospace.
Why This GST Change Matters
- Brings simplicity → fewer slabs (mostly 5% and 18%)
- Supports Make in India → major cuts in defence GST
- Helps consumers → essentials and electronics become cheaper
- Discourages luxury/sin consumption → new 40% slab introduced
- Effective from 22 September 2025
Key Highlights of GST 2025 Reform
- Four-tier system largely reduced to 0%, 5%, 18%, and 40%
- Defence boost → drones, radios, tanks moved to nil/5%
- Consumer relief → packaged food, FMCG, electronics shifted to lower slabs
- Luxury burden → 40% GST on certain luxury goods and sin items
- Tobacco continues with cess → remains expensive
GST Old vs New Comparison (Category-Wise)
Here’s the complete category-wise GST rate chart with clear explanations:
| Category | Old GST Rate | New GST Rate | Impact |
|---|---|---|---|
| Essentials & Basic Food | 0% / 5% | Mostly 0% / 5% (more items exempted) | Broader list of essentials exempted → everyday staples cheaper |
| Packaged Foods / FMCG | 5% / 12% / 18% | Mostly 5% or 18% | Packaged snacks, oils, biscuits shifted to lower slabs |
| Textiles & Footwear | 5% / 12% / 18% / 28% | 5% or 18% (luxury may face 40%) | Affordable clothes & shoes cheaper, luxury branded costlier |
| Electronics & Durables | 12% / 18% (some 28%) | 5% or 18% | Mobiles, TVs, fridges largely cheaper |
| Automobiles | 18% / 28% + cess | 5% / 18% (luxury up to 40%) | Mass vehicles cheaper, luxury cars costlier |
| Hotels & Travel | 0% / 12% / 18% | 5% / 18% | Budget stays and travel easier on pocket |
| Health & Education | Exempt / 5% / 12% | Exempt / 0% / 5% | Core services remain tax-free or minimal |
| Defence & Aerospace | 12% – 28% | 0% / 5% | Major relief for defence items, drones, radios |
| Tobacco & Sin Goods | 28% + cess | 40% + cess | No relief, remains expensive |
| Luxury & Jewellery | 3–12% / 28% + cess | 40% slab for luxury, jewellery ~3–5% | Luxury costlier, jewellery largely unchanged |
| Services (IT, Telecom, etc.) | Mostly 18% | Mostly 18% (some devices 5%) | Services unchanged, telecom gear cheaper |
Defence & Aerospace: Special Focus
One of the biggest winners of GST reform 2025 is the defence sector. To boost domestic manufacturing and reduce imports, the government slashed GST on multiple defence-related items:
- Drones (UAVs): 18–28% → 5%
- Tanks & Armoured Vehicles: 12% → 5%
- Walkie-Talkies & Radios: Higher slabs → 5%
- Military Components & Gear: Many items now Nil GST (0%)
👉 This move aligns with Atmanirbhar Bharat, encouraging Indian defence production, startups, and drone innovation.
Impact on Businesses
Businesses across India must prepare quickly:
- Update HSN codes & invoices → ensure correct tax rate applied
- Reprice products → pass on GST benefits to customers
- Modify billing software → align with new slabs before 22 Sep 2025
- Communicate with customers → price drops build trust
- Monitor cess items → tobacco & luxury vehicles still attract extra cess
Impact on Consumers
For common citizens, the changes bring mixed news:
- Good news: Essentials, packaged food, electronics, travel → cheaper
- Bad news: Luxury cars, branded apparel, premium items → costlier
- Neutral: Services like telecom, IT, hospitality remain largely unchanged
Official PDF Notification
📌 The government has released an official notification PDF listing item-wise GST changes with HSN codes.
👉 Download Official GST Notification (PDF)
(Replace the above link with the official file from GST Council / PIB once uploaded to your site.)
Disclaimer
This article is for information purposes only. GST rates are subject to official government notifications. Please consult your tax advisor or the official GST portal before making any business decisions.
Final Thoughts
The GST 2025 reform is a historic change:
- Simpler structure (0%, 5%, 18%, 40%)
- Boost to defence, Make in India, and SMEs
- Relief for consumers on essentials & gadgets
- Higher tax on luxury & sin goods
Businesses should be compliance-ready by 22 September 2025.
Perfect ✅ Adding a FAQ section will make your blog even more SEO-friendly and helpful for readers. Here’s a ready-to-use FAQ block you can paste at the end of your WordPress post:
❓ Frequently Asked Questions (GST Changes 2025)
1. When will the new GST rates come into effect?
The new GST rates will be effective from 22 September 2025, as per the GST Council’s 53rd meeting.
2. What are the main GST slabs after the reform?
India now has four key GST slabs:
- 0% (Nil rate) – essentials, some defence items
- 5% – FMCG, packaged foods, drones, defence gear, budget items
- 18% – majority of goods & services (electronics, telecom, IT, travel)
- 40% – selected luxury and sin goods
3. What is the impact of GST reform on defence items?
Defence and aerospace items received major relief.
- Drones, walkie-talkies, radios → moved to 5%
- Tanks and armoured vehicles → now 5%
- Many military components → Nil GST (0%)
This boosts India’s Atmanirbhar Bharat defence initiative.
4. Will daily essentials become cheaper?
Yes ✅
More essentials like grains, milk-based items, and unbranded foods are now in the 0% slab. Everyday grocery and household expenses will reduce.
5. Which products will get costlier?
Luxury and sin goods will be more expensive.
- Luxury cars, branded apparel, premium watches, certain jewellery → higher GST (up to 40%)
- Cigarettes & tobacco products → remain costly due to GST + cess
6. Do businesses need to update GST returns immediately?
Yes. Businesses must:
- Update invoices, software, and HSN codes
- Ensure correct rate filing in GSTR-1 and GSTR-3B
- Adjust pricing strategy to reflect new slabs
7. Where can I find the official GST notification?
The government has released a detailed notification PDF with HSN code changes.
👉 Download GST Notification PDF
8. How will GST changes affect hotels and travel?
Budget hotels and travel services are likely to get cheaper as rates are simplified into 5% or 18%, providing relief to middle-class travelers.
9. Are jewellery and gold affected by GST reform?
Most jewellery remains at 3–5%, but luxury/diamond-studded or high-end jewellery may attract higher GST or fall under the new 40% slab.
10. What should I do if I’m confused about my product’s GST rate?
Always:
- Check the HSN code in the official GST notification
- Consult your tax advisor
- Use the GST portal for updated rates
💬 Join the Conversation
What do you think about the new GST reforms?
👉 Drop your questions and thoughts in the comment section below.
We’ll reply to clear your doubts.