The indian government has revamped the Goods and services Tax (GST) structure, effective from 22 september 2025, simplifying the system and bringing relief to middle-class buyers. Here’s a breakdown of what has changed and how it affects your pocket.
1. Simplified Tax Slabs for Ease of Buying
The GST system now has only two slabs:
5% – for essential and low-cost items
18% – for most goods and services
Luxury items like premium cars and SUVs will still attract 40% GST, keeping them expensive. The move is aimed at boosting consumption while making daily essentials more affordable.
2. Mobile Phones: Slight Price Hike
All mobile phones will now attract 18% GST, up from the previous 12%.
Example:
Mobile base price: Rs20,000
Earlier GST (12%): Rs2,400 → Total Rs22,400
New GST (18%): Rs3,600 → Total Rs23,600
✅ Result: Slight increase in cost, meaning mobile buyers will pay more.
3. Cars: Big Relief for hatchbacks and Sedans
Ordinary cars (hatchback/sedan) now attract 18% GST, down from 28%, giving buyers a major saving.
SUVs and luxury cars: Still taxed at up to 40%, keeping prices high.
Electric cars (EVs): GST remains 12%, so no change in pricing.
💡 Buyers upgrading from bikes or planning first cars can benefit significantly from this tax cut.
4. Gold: No Change
Gold continues to attract 3% GST on jewellery, decorative items, and other products.
Example:
Jewellery price: Rs1,00,000 → GST: Rs3,000
No change means gold remains steady in cost.
5. Electronic Items: Major Savings
Products like TVs, refrigerators, washing machines, dishwashers, and ACs see a drop from 28% to 18% GST, making these appliances much more affordable.
Example (AC):
Base price: Rs35,000
Old GST (28%): Rs9,800 → Total Rs44,800
New GST (18%): Rs6,300 → Total Rs41,300
✅ Savings: Rs3,500 per AC, and similar savings on other electronics.
6. Apparel: Mixed Impact
Clothes up to Rs1,000 → 5% GST (no change)
Clothes above Rs1,000 → 18% GST, up from 12%
💡 Premium and branded clothing may become slightly more expensive, while everyday apparel remains affordable.
7. Big Relief for the Middle Class
The new GST structure is particularly beneficial for middle-class families buying electronics, home appliances, and other essentials during the festive season.
More affordable ACs, TVs, and fridges
Better access to modern amenities
Higher disposable income due to tax relief on essential goods
⚠️ Note: Some items like premium clothes and mobile phones will see a small increase, and luxury vehicles remain costly.
In Summary:
The GST reform of 2025 is a game-changer for the middle class, offering savings on electronics and household items while simplifying tax compliance. While luxury and premium goods remain expensive, everyday essentials are now easier on the wallet, making festival shopping much more enjoyable.
Disclaimer:
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
.jpg)
click and follow Indiaherald WhatsApp channel