This Diwali, the Government of India has given citizens, farmers, and businesses a historic gift — Next-Gen GST Reforms. These changes are designed to reduce the cost of essentials, support industries, and simplify compliance.
Let’s break down the reforms in detail so you can clearly understand how they affect you, your family, and your business.
Here’s a comparison that captures key items affected by the reforms:
| Item Category | Old GST Rate | New GST Rate (from Sept 22) |
|---|---|---|
| Household essentials (soap, shampoo, toothpaste) | 12–18% | 5% |
| Indian breads (roti), paneer (packaged) | 5–12% | 0% (Nil) |
| Dairy products (butter, cheese, UHT milk) | 12% | 5% or Nil |
| Two-wheelers, small cars, ACs, TVs, cement | 28% | 18% |
| Farm machinery, kitchenware, bicycles | 12%–18% | 5% |
| Health & life insurance premiums | 18% | 0% (exempt) |
| Sin & luxury goods (tobacco, luxury cars) | 28% + cess | 40% (special rate) |
Let’s break down the reforms in detail so you can clearly understand how they affect you, your family, and your business.
The government has reduced GST on everyday items to make living more affordable.
| Item | Old Rate | New Rate |
|---|---|---|
| Hair Oil, Shampoo, Soap, Toothpaste | 18% | 5% |
| Butter, Cheese & Dairy Spreads | 12% | 5% |
| Pre-packaged Namkeen, Bhujia & Mixtures | 12% | 5% |
| Utensils | 18% | 5% |
| Feeding Bottles & Clinical Diapers | 12% | 5% |
| Sewing Machines & Parts | 12% | 5% |
Impact: Families will spend less on groceries and personal care items.
The government has made healthcare more affordable and accessible.
| Item | Old Rate | New Rate |
|---|---|---|
| Individual Health & Life Insurance | 18% | Nil |
| Thermometers | 12% | 5% |
| Medical Grade Oxygen | 12% | Nil |
| All Diagnostic Kits & Reagents | 12% | 5% |
| Glucometer & Test Strips | 12% | 5% |
| Corrective Spectacles | 12% | 5% |
Impact: Medical expenses reduce, providing direct relief to households.
Farmers benefit directly with reduced costs on agricultural tools and inputs.
| Item | Old Rate | New Rate |
|---|---|---|
| Tractor Tyres & Parts | 18% | 5% |
| Tractors | 12% | 5% |
| Specified Bio-Pesticides & Micro-Nutrients | 12% | 5% |
| Drip Irrigation Systems & Sprinklers | 12% | 5% |
| Agricultural Machinery (soil prep, harvesting, etc.) | 12% | 5% |
Impact: Lower input costs → Higher profits for farmers.
Vehicle GST rates have been rationalized to boost mobility and affordability.
| Item | Old Rate | New Rate |
|---|---|---|
| Petrol/Diesel Cars (≤1200cc & ≤4000mm) | 28% + cess | 18% |
| Diesel Cars (≤1500cc & ≤4000mm) | 28% + cess | 18% |
| 3-Wheelers | 28% | 18% |
| Motorcycles (≤350cc) | 28% | 18% |
| Motor Vehicles for Goods Transport | 28% | 18% |
Impact: Small car owners, two-wheeler buyers, and transport operators will benefit significantly.
Education materials are now tax-free to support students and parents.
| Item | Old Rate | New Rate |
|---|---|---|
| Maps, Charts & Globes | 12% | Nil |
| Pencils, Sharpeners, Erasers | 12% / 5% | Nil |
| Exercise Books & Notebooks | 12% | Nil |
Impact: Parents and students will save money on school supplies.
Households can now buy appliances at lower costs.
| Item | Old Rate | New Rate |
|---|---|---|
| Air Conditioners | 28% | 18% |
| TVs (below 32”) & LCD/LED TVs | 28% | 18% |
| Monitors & Projectors | 28% | 18% |
| Dishwashing Machines | 28% | 18% |
Impact: Middle-class families can now purchase electronics at lower prices.
Along with GST rate cuts, the government has announced process simplifications:
The Next-Gen GST Reform is not just a festive gift — it’s a structural change that makes living more affordable, empowers farmers, supports businesses, and strengthens India’s economy.
This Diwali, every household, student, farmer, and entrepreneur will feel the difference.