When Will GST Rate Cut Be Effective?

The Ministry of Finance has notified a revised GST rate framework effective September 22, 2025, marking a major shift from the earlier four slab structure. Based on GST Council recommendations, the new system streamlines rates into two broad slabs across seven HSN-based schedules, aiming to simplify compliance, reduce disputes, and bring clarity for taxpayers and businesses.
Key Highlights of the New GST Rates
- Effective Date: September 22, 2025
- Previous System: Four GST slabs (5%, 12%, 18%, 28%)
- New System: Seven schedules based on HSN codes
- Objective: Simplify compliance, reduce disputes, and streamline tax structure
2025 GST Rate Slab and Items
| GST Slab | Items |
| 0% / Nil | Paratha, UHT milk, Pizza bread, Works of art and antiques, Natural cut diamonds |
| 5% | Apparel ≤ Rs 2,500, Cotton quilts ≤ Rs 2,500, Tooth powder, Candles, Handbags (cotton/jute) |
| 12% → 5% | Condensed milk, Butter & ghee, Cheese, Footwear ≤ ₹2,500, Almonds |
| 18% / No Change | Footwear > ₹2,500 per pair |
| Nil / 0% from 18% | Military aircraft parts, Drones batteries, Ship-launched missiles, Ejection seats, RPA (military use) |
Note: This list highlights only selected items for each GST slab. It is not exhaustive, and taxpayers should refer to the official GST notification for the complete item-wise list.
How the GST Rate Cut Impacts Businesses and Consumers
- Businesses: Reduced GST rates simplify compliance, lower accounting complexities, and may reduce tax disputes.
- Consumers: Certain everyday items, apparel, and dairy products will be taxed at lower rates, potentially reducing retail prices.
- Sector specific benefits: Items like medicines, UHT milk, and essential goods see significant relief under the revised rates.
Read More: Pharma Industry Relief: Govt Simplifies Post GST Rate Cut Pricing Compliance.
Conclusion
The new GST rate framework takes effect from September 22, 2025, offering a simplified structure to benefit both businesses and consumers.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Published on: Sep 18, 2025, 2:33 PM IST

Neha Dubey
Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.
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