Overview

• India’s four-slab GST is consolidated into 5% and 18% rates with a targeted 40% band for select sin and ultra‑luxury items, taking effect on September 22.
• Everyday essentials, school supplies, and 33 life‑saving drugs shift to 0% or 5% GST, and individual life and health insurance premiums become tax‑free.
• Goods previously at 28%—including small cars, motorcycles up to 350cc, tractors, cement and consumer electronics like ACs and TVs—move to the 18% slab.
• Tobacco products stay at 28% plus compensation cess until state compensation loans are repaid, after which they transition to the 40% slab; high‑end vehicles and sugary aerated drinks fall under 40%.
• Industry leaders welcomed the overhaul and equities rose, while research houses such as Morgan Stanley expect a festive‑season demand lift and a modest easing in inflation.