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Published: Sept 4, 2025
New rates apply from: Sept 22, 2025
GST New Rate Cuts were cleared at the 56th GST Council meeting. India is moving to a simpler two‑slab system (5% and 18%) plus a 40% slab for a few luxury/sin items. For families, the bottom line is simple: many everyday bills will drop once the new rates kick in. This guide explains what gets cheaper, from when, how much you save, and what to check on your bill—in plain English.
GST New Rate Cuts: What should you remember?
- The invoice date decides the rate. If the bill is made on or after Sept 22, the new GST rates apply. If it’s dated before, the old rates likely apply.
- MRP vs invoice: Packaged goods may take a few days to show new MRPs. Services and big-ticket items (salon, hotels, insurance, electronics) usually reflect new GST right on the invoice from the effective date.
- To cross‑check, see PIB’s press note and CBIC’s GST updates.
1) Life & Health Insurance → 0% GST (earlier 18%)
What changed: Individual life and health insurance policies are exempt from GST.
What this means for you: Renewals or monthly premiums on/after Sept 22 should show 0% GST. Group/corporate policies may differ—check your policy note.
Quick math: Yearly premium ₹20,000 → GST earlier ₹3,600 (18%). New GST ₹0 → ₹3,600 saved.
2) Salon, Gym & Yoga → 5% GST (earlier 18%)
What changed: Salons, gyms and yoga centres move to 5% GST.
What this means for you: Haircut, facial, spa, club membership, yoga class—your bill should drop because GST is lower. Ask the cashier to show the GST line on the bill (it should say 5% after Sept 22).
Quick math: Service ₹1,000 → earlier total ₹1,180 (18%). New total ₹1,050 (5%). Save ₹130.
3) Budget Hotels (≤ ₹7,500/night) → 5% GST (without ITC) (earlier 12% with ITC)
What changed: Hotel rooms up to ₹7,500/night get 5% GST.
What this means for you: Family trips and business stays become cheaper if the room tariff per night is ≤ ₹7,500. Food/room service may have separate GST—check the line items.
Quick math: Room ₹7,500 → tax was ₹900 (12%). New tax ₹375 (5%). Save ₹525 per night.
4) Electronics & Home Appliances → 18% GST (earlier 28%)
What changed: ACs, large-screen TVs, washing machines, dishwashers move to 18%.
What this means for you: Invoice‑based savings start from Sept 22. If a store shows “base price + GST” on the bill, you’ll see the lower 18% there. MRPs on boxes may take time to update; ask the store for an invoice discount reflecting the new GST.
Quick math: AC base price ₹30,000 → tax earlier ₹8,400 (28%); new tax ₹5,400 (18%) → ₹3,000 saved.
5) Small Cars & Motorcycles (≤350cc) → 18% GST (earlier 28%)
What changed: Small cars and commuter bikes move to 18% GST; bigger engines lean toward higher/slab or cess.
What this means for you: Expect a lower ex‑showroom component; total on‑road price also depends on state taxes, registration, and insurance. Auto parts are broadly aligned at 18%, helping maintenance costs.
Quick math (illustrative): Car base ₹6,00,000 → GST earlier ₹1,68,000 (28%); new GST ₹1,08,000 (18%) → ₹60,000 saved (ex‑showroom).
What did not get cheaper (so you’re not surprised)
- Tobacco, pan masala, aerated/sugary drinks and some luxury vehicles continue to be taxed high (some under the 40% bracket).
- A few categories (e.g., some apparel price points) may see no change or a hike; always check the GST% line on your bill before paying.
- If you bought before Sept 22, the old rate likely applies (because the invoice date is earlier).
FAQs
Q1. From when will my bills fall?
When your invoice is dated Sept 22 or later.
Q2. I paid an advance earlier—do I still get the lower GST?
If the final invoice is made on/after Sept 22, the new rate should apply to that billed portion. Keep receipts and ask the merchant to clarify the split.
Q3. Will online shopping show lower prices automatically?
Most big sites update invoice GST on the effective date. Check the final checkout invoice for the GST line (5%/18%/0%).
Q4. Do I get a refund for policies/EMIs already billed?
Generally, changes are prospective (from the effective date). Renewals/invoices raised earlier usually won’t be revised.
Q5. Where can I verify official details?
See PIB’s press note and CBIC’s GST updates page. For item‑wise coverage, check mainstream explainers on Mint, Economic Times, TOI or NDTV.
Quick checklist before you pay
- Check the invoice date (should be Sept 22 or later).
- Look at the GST percentage line (should show the new rate).
- For packaged goods, ask if the invoice reflects the new GST even if MRP hasn’t changed yet.
- For cars/electronics, ask the dealer to break out base price and GST on the pro‑forma invoice.
Conclusion: What to do now
If you can wait, time your purchases/renewals on or after Sept 22 to benefit from the GST New Rate Cuts. Check the GST% line on every bill, and for big purchases, insist on a pro‑forma invoice showing the new rate. Bookmark PIB and CBIC in case any clarifications are posted.
