GST:Rich Pay More, You Pay Less? Inside India’s Radical New ‘Rich Tax’

GST : Get ready for a monumental shift in India’s economy that will reshape the monthly budget of every single household. Starting September 22nd, the nation will implement its most significant GST (Goods and Services Tax) reform since 2017. Timed perfectly before the grand festive season of Navratri and Diwali, this sweeping overhaul is designed to bring immense relief to the common person by slashing taxes on essential food items and daily necessities.

In a landmark decision during the 54th GST Council meeting, Union Finance Minister Nirmala Sitharaman announced the elimination of the confusing 12% and 28% tax slabs for most goods. This move paves the way for a simpler, more transparent tax structure that promises to reduce the burden on your wallet.

So, as this revolutionary new tax regime rolls out, what will actually get cheaper and what will become more expensive? Here is your definitive guide to the new GST rates.

The Biggest Relief: Items That Are Now TAX-FREE! (0% GST)

In a move that brings direct relief to families, students, and patients, the government has completely removed GST from several crucial items.

• Milk (UHT): Slashed from 5% to ZERO.
• Bread (Roti, Khakhra, Chapati): Dropped from 5% to ZERO.
• Pizza Bread & Paratha: A massive drop from 18% to ZERO.
• Student Essentials (Erasers, Pencils, Sharpeners): Down from 12% to ZERO.
• Notebooks & Exercise Books: Tax-free, down from 12%.
• Essential Medicines (including Cancer Drugs): A critical reduction from 12% to ZERO.
• Diamonds (up to 25 cents): A huge drop from 18% to ZERO.

Big Savings on Daily Needs: What Now Falls Under the 5% GST Slab

Your daily grocery and household shopping is about to get significantly cheaper as numerous items are moved from the higher 12% slab to the much lower 5% bracket.

• Paneer & Chhena (Pre-packaged): Down from 12% to just 5%.
• Butter, Ghee & Cheese: A significant saving, down from 12% to 5%.
• Footwear (up to ₹2,500): More affordable, down from 12% to 5%.
• Dry Fruits & Nuts: Cheaper for a healthy diet, down from 12% to 5%.
• Candles: Reduced from 12% to 5%.
• Baby Essentials (Feeding Bottles, Nipples): Now cheaper, down from 12% to 5%.
• Eco-Friendly Bags (Cotton/Jute): Tax reduced from 12% to 5%.
• Wooden Kitchenware: Down from 12% to 5%.
• Umbrellas & Sun Umbrellas: More affordable, down from 12% to 5%.

The New Standard: What’s Shifting to the 18% GST Bracket

While many essentials are cheaper, some items will now see a higher tax rate as 18% becomes the new standard for a vast range of goods.

• Jewelry (including gold up to 25 cents): A significant jump from 3% to 18%.
• Televisions (over 32 inches) & Mobile Phones: Tax rate remains unchanged at 18%.
• Home Appliances (Refrigerators, Washing Machines): Rate remains the same at 18%.
• Clothing (per item over ₹500): Will become costlier, moving up from 12% to 18%.
• Footwear (above ₹2,500): Higher-end footwear gets more expensive, up from 12% to 18%.

The New ‘Rich Tax’: Brace Yourself for the 40% Luxury Slab

In a move aimed squarely at the ultra-affluent, the government has introduced a brand-new 40% luxury tax on a host of premium and demerit goods, making them significantly more expensive.

Luxury Cosmetics (International Brands): A huge leap from 18% to 40%.

Luxury Vehicles: Jumping from 28% to a staggering 40%.

Tobacco Products (Cigarettes, Pan Masala): Moving from 28% to 40%.

Air Conditioners (Premium Models): Soaring from 18% to 40%.

Luxury Watches (e.g., Swiss Brands): A steep hike from 18% to 40%.

Private Jets & Yachts: Up from 28% to 40%.

Premium Services (Spas, Luxury Hotels): Increasing from 18% to 40%.

Imported Wine: Will see a significant price hike, from 18% to 40%.

High-Performance Superbikes: Up from 28% to 40%.