Overview

• India’s GST regime shifts to two main rates of 5% and 18%, adds a 40% demerit band for sin and ultra‑luxury items, and scraps the compensation cess for most goods.
• Many staples and personal-care items move to 0% or 5%, salon/spa/gym services drop to 5% without input tax credit, individual life and health insurance become tax‑exempt, and food‑delivery fees attract 18%.
• CBIC has told firms to cut prices immediately, allowing revised‑MRP stickers on existing stock and continued use of old packaging till March 2026, as retailers and manufacturers reissue price lists and some companies pledge full pass‑through.
• The Centre pegs the annualised revenue impact at about ₹48,000 crore, Crisil views the burden as modest, and the Finance Minister estimates roughly ₹2 lakh crore more in consumers’ hands to spur demand.
• State governments, including Uttarakhand, have issued SGST notifications, and sector shifts include autos where small cars, two‑wheelers up to 350cc and many parts fall to 18%, SUVs face 40%, and EVs remain at 5% with major automakers cutting prices.