Changes In The Consumption Tax - Entire Breakdown: GST Council

Pragya Pathak

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Updated: 04-09-2025 at 3:32 PM

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On 3rd September 2025, the GST Council of India introduced significant changes to the commodities subject to consumption taxes. Consumption taxes have not been updated or changed since the time of their establishment. i.e., back in the year 2017. Due to the changes in the consumption taxes, the final prices of various things, ranging from medicines to cars, will either increase or decrease.

Read the article to learn more about the exact changes proposed and approved by the council concerning consumption taxes.

Details Of The Approved Changes In Consumption Taxes

The Goods and Services Tax (GST) Council has decided to operate through two limiting slabs. i.e., 5% & 18% which would eliminate the present four limiting slabs of 5, 12, 18, and 28%. Authorities have set aside 40% for some special items like expensive & luxurious cars, tobacco, and cigarettes.

Please note that the new rates for all products, except pan masala, gutka, cigarettes, chewing tobacco, zarda, and bidi, will begin effectively from September 22nd.

1. Cheap Items Under New Consumption Tax

Commodities that will be cheaper under the new consumption tax rates are laid out below in tabular form for one’s reference:

Category	Commodities	Tax reduction
Edible items and beverages	Chapatis and paranthas Ultra-high temperature milk, chena or paneer, pizza bread, and khakra	To 0 from 5%
	Butter, ghee, dry nuts, condensed milk, sausages and meat, sugar-boiled confectionery, jam and fruit jellies, tender coconut water, namkeen, packaged drinking water (20 litre bottles), fruit pulp or juice, drinks that have milk, ice cream, pastry, biscuits, corn flakes and cereals. Plant-based milk drinks	To 5% from 18%
Household items	Tooth powder, feeding bottles, kitchenware, tableware, umbrellas, utensils, bicycles, bamboo furniture, and combs	From 12% to 5%.
	Shampoo, talcum powder, toothpaste, toothbrushes, face powder, soap, and hair oil	From 18% to 5%.
Stationery items	Maps, charts, globes, pencils, sharpeners, crayons and pastels, exercise books and notebooks	To 0% from 12%
Healthcare	Life-saving drugs, health-related products, and some medical devices	To 5% from 12 %
	thermometers, medical grade oxygen, all diagnostic kits and reagents, glucometer and test strips and corrective spectacles	To 5% from 12 to 18%
Automobile	Motorcycles up to 350 cc Auto components	To 18% from 28%
Fuel	Petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length	To 18% from 28%
Agricultural products	Fertiliser inputs, including sulphuric acid, nitric acid and ammonia Fixed speed diesel engines of power not exceeding 15HP, hand pumps, nozzles for drip irrigation equipment and sprinklers, agricultural and horticultural machinery for soil preparation, harvesting and threshing machinery, composting machines, etc.	To 5% from 12 to 18%

2. Expensive Items Under New Consumption Tax

Expensive items under the new consumption tax rates are as follows, for one’s better understanding:

Category	Commodities	Tax reduction
Soft drinks	Popular soft drinks, such as Coca-Cola and Pepsi, along with other non-alcoholic beverages Caffeinated beverages All goods (including aerated waters) containing added sugar or other sweetening matter or flavoured	To 40% from 28%
Automobile	All automobiles above 1,200 cc and longer than 4,000 mm, as well as motorcycles above 350 cc, yachts and aircraft for personal use, and racing cars	40%
Leisure	Services by a race club, leasing or rental services, and casinos/gambling/horse racing/lottery/online money gaming, including IPL tickets	40%

Conclusion

The GST council has finally taken a step that was not taken since 2017, the year when the consumption tax came into existence. The new tax rates will have varying impacts on different individuals, depending on their preferences and usage. Please keep yourself updated with the new changes and manage your finances accordingly.

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