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New GST Rates Approved: What Changes from September 22, 2025

India's GST Council has approved a sweeping overhaul of the Goods and Services Tax structure, which will come into effect from September 22, 2025 . This move is aimed at simplifying taxes, boosting spending, and making everyday essentials cheaper for millions of people. Key Changes in GST Rates Simplified Rate Structure: The previous four GST slabs (5%, 12%, 18%, 28%) will now be merged into two main rates: 5% and 18%. Special 40% Slab: A new 40% GST rate is set for specific “sin” and luxury goods, such as tobacco products, pan masala, gutkha, premium vehicles, and high-sugar drinks. These products will move to the new slab after all compensation cess loan obligations are cleared; until then, their current rates continue. Most Essentials Cheaper: Items like roti, plain bread, paneer, chena, ice cream, and hair oil see GST dropped to 5% or even zero (nil rate). Household appliances and consumer electronics, including TVs and air conditioners, are cut from 28% to 18%. ...