2025 GST Reforms

From 22nd September 2025, India will see yet another rationalization within the Goods and Services tax regime. Essentially, all goods and services will now fall under either of the following two tax slabs - 5% and 18%.

The key takeaways include the following:

• GST reforms cut taxes on household essentials (soaps, toothpaste, Indian breads) to 5% or Nil boosting affordability

• Life-saving drugs, medicines reduced from 12% to Nil or 5% making healthcare affordable

• Two-wheelers, small cars, TVs, ACs, cement cut from 28% to 18% bringing relief to middle-class

• Farm machinery, irrigation equipment cut from 12% to 5%, reducing farming costs

• Tobacco, pan masala, aerated drinks, and luxury goods taxed at 40%

This move is expected to increase the spending power of the country's citizens and a step forward in improving the ease of doing business in India. Long anticipated, this feels like a step in the right direction. To understand how these reforms affect different industry sectors, you may want to go through the following link to a document put together by the government of India <doc202594628401.pdf>