Overview

• From September 22, the nationwide rollout replaces the 5%, 12%, 18% and 28% regime with 5% and 18% rates, while ultra‑luxury and sin items face a 40% band and tobacco remains at 28% plus cess.
• Prime Minister Narendra Modi framed the change as a ‘GST Bachat Utsav’, saying combined GST cuts and this year’s income‑tax relief will save households about ₹2.5 lakh crore.
• The GST Council cleared the package at its 56th meeting with Centre–state consensus, with the government highlighting benefits for consumers, MSMEs and traders.
• Many everyday goods and services move to lower rates or exemptions, with officials citing 99% of former 12% items now at 5% and reductions spanning food, medicines, insurance, hotel stays and school supplies.
• Sectoral shifts include two‑wheelers up to 350cc, small cars and auto parts cut to 18%, cement down to 18%, tractors at 5%, and reported price reductions by brands such as Amul and Mother Dairy on dairy and FMCG items.