GST Reform: Roti, Cancer Drugs, and Classroom Supplies Turn GST-Free from Sept 22

On September 3, 2025, at its 56th meeting, the GST Council approved big reforms to simplify India’s tax system. The four-tier structure has now been reduced to just 2 slabs, 5% and 18%, removing the 12% and 28% categories.

Essentials Go GST-Free

A key relief is the expansion of the zero-tax category.

• Food: UHT milk, paneer, chena, roti, naan, paratha, and other breads.
• Education: Maps, charts, globes, pencils, sharpeners, crayons, notebooks, and erasers.
• Healthcare: 33 life-saving medicines, including cancer drugs, are now fully exempt. Also, no GST on individual health and life insurance policies.

Lower GST on Daily Items

Many items that were taxed at higher rates will now fall under the 5% slab.

• Personal care: Hair oil, soaps, shampoos, toothbrushes.
• Food items: Namkeens, pasta, noodles, coffee, cornflakes, butter, ghee, dairy spreads.
• Sectors: Bio-pesticides, irrigation tools, solar heaters, windmills, diagnostic kits, spectacles, handicrafts, and marble blocks.

High-Tax Items Shifted to 18%

Products like ACs, TVs over 32 inches, small cars, motorcycles below 350cc, tractors, trucks, buses, cement, and auto parts, earlier taxed at 28%, will now come under the 18% slab.

Luxury and Sin Goods Unchanged

Goods like cigarettes, pan masala, aerated drinks, luxury cars, large bikes, yachts, and private aircraft will continue to attract the top 40% GST rate.

Why the Change?

The government said the move makes the tax system simpler and more citizen-friendly. It also removes problems like inverted duty structures and classification issues. The rate cuts will help households, improve healthcare affordability, and support labour-intensive sectors.

Read More: GST New Rates: GoM Proposes 18% GST on Premium EV Cars!

Conclusion

From September 22, 2025, GST will become simpler with just 2 main slabs and several essential goods made tax-free. The reform is expected to ease household expenses, improve access to medicines, and boost business growth across sectors.

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