Overview

• Union Finance Minister Nirmala Sitharaman said the Council unanimously scrapped the 12% and 28% slabs, set a new 40% rate for select sin and luxury items, and fixed the rollout for September 22, 2025.
• A wide basket of goods shifts to lower rates: personal care items such as hair oil, shampoo and toothpaste move to 5%, most 12% essentials go to 5%, and many consumer durables including TVs, refrigerators, washing machines and air-conditioners fall to 18%.
• Health insurance is exempted from GST, several life‑saving medicines move to nil, and long‑standing inverted duties are corrected, including cuts to 5% for man‑made fibre and yarn, fertiliser inputs like sulfuric and nitric acid, and renewable‑energy devices.
• Automobiles see broad relief with small cars, motorcycles, three‑wheelers, buses, trucks and ambulances moving to 18%, while a 40% slab will apply to larger cars and other luxury or demerit goods; decisions on any levy over 40% were deferred.
• States flagged revenue pressures, with loss estimates around ₹47,700–₹48,000 crore annually and compensation talks continuing; the Centre noted certain tobacco and pan masala items will retain existing rates and cess treatment until compensation‑cess obligations are cleared.