Overview

• After a unanimous Council vote, GST shifts to 5% and 18% core rates from September 22, with individual life and health insurance made tax-free and several education and stationery items moved to a nil rate.
• A 40% rate targets select demerit and high-end items such as large cars, motorcycles above 350cc, sugary drinks, yachts and private aircraft, while tobacco products stay at 28% plus cess until compensation loans are cleared before moving to 40%.
• Autos and mobility see broad cuts to 18% for small cars, two-wheelers up to 350cc, three-wheelers and commercial vehicles, EVs remain at 5%, auto components align at 18% to ease inverted duties, and cement drops to 18% to lower construction costs.
• Many daily-use goods shift lower, including personal care items to 5% and consumer electronics like air-conditioners and televisions to 18%, alongside relief for agriculture with farm machinery and inputs largely at 5%.
• Markets and industry welcomed the overhaul as analysts flagged a demand boost; the government pegs the net fiscal impact near Rs 48,000 crore, with operational notifications and cess transitions next in the rollout.