Here's what's changing

GST 2.0 from September 22 reduces food, medicine, cement, and electronics prices while increasing charges on soft drinks, luxury vehicles, and cigarettes.

Major GST overhaul from September 22: 375 products become less expensive, 50 items shift to zero rate, while SUVs, soft drinks, and sin products are more expensive.

This transformation slashes the new GST 2.0 list on essential goods and medicines, moves over 50 items to the zero tax (Nil GST) bracket, and cuts levies on cement, electronics, and services. At the same time, it merges cess with GST to impose a 40 percent rate on luxury and sin goods like tobacco, aerated drinks, and large cars.

What gets cheaper under GST 2.0

Prime Minister Narendra Modi   asserted that India will be making a crucial move towards the development of an Atmanirbhar Bharat from the onset of Navratri, emphasizing quality manufacturing and swadeshi practices to strengthen the economy. 

September 22, the next-generation new GST 2.0 slab will be rolled out. India will starting from tomorrow celebrating the GST Bachat Utsav from tomorrow. GST Bachat Utsav would create savings, and individuals would be able to buy things comfortably.

After GST 2.0, all segments of society will gain from this because it will result in greater happiness. This will speed up the growth story and bring in investments.

The GST has not only streamlined India's indirect tax system but also brought in huge savings to the poor, middle class, and neo-middle class.

Daily essentials-what gets cheaper

New GST on milk-UHT milk, pre-packaged paneer, and chena
All Indian breads (chapati, roti, paratha, parotta, khakhra, pizza bread)

The government said that the forthcoming GST reforms would give a significant boost to MSMEs, which would enable them to compete more aggressively in domestic and international markets. He appealed to India's manufacturing units to adopt world-class quality. The manufacturing units need to manufacture the best quality products. India has to be identified with the best quality products.

What becomes cheaper under the GST 2.0 regime

Big Relief for middle class : Daily Necessities like GST on shampoo and other household items Witness Massive Price Slumps. Common items that constitute a large chunk of household spending will witness a sharp cut in prices. Several items that were earlier in the 12% and 18% slabs have been shifted to the 5% slab or have been exempted.

Healthcare and Education Expenses to be Cut

In a major step towards making essential commodities more affordable, GST on individual health and life insurance premiums has been exempted altogether. Educational items have also been reduced by a major tax slash.

Small car GST rate- Boost  to the Automotive and Consumer Electronics Industry

The 28% GST slab, which was one of the contentious points for various industries, has been rationalized, with several big-ticket items shifting to the 18% slab, which could result in a substantial price reduction for consumers

Agriculture and Farming to Gain from Reduced Taxes

To aid the agricultural industry, the GST Council has cut the tax on a number of farm-related items and machinery.

Understanding GST rates on two-wheelers and four-wheelers

As of today's date, September 22, 2025, the vehicle price dynamics of India have also undergone a drastic shift with the implementation of the GST 2.0 reforms. This has resulted in major reductions in prices in most models of new gst rates of two-wheelers and four-wheelers, as they become more affordable for buyers. Below is a step-by-step breakdown of the new GST rates and their impact on the final price of your next car.

Two-Wheelers: A Commuter Segment Boosted Big Time

The new GST rates for bikes have brought some good news for a majority of two-wheeler buyers in the country. The previous uniform slab of 28% GST has been rationalized, with substantial savings made. The move is bound to benefit a large chunk of the market, including best-selling commuter motorcycles and scooters.
The new GST regime is welcome news for the majority of India's two-wheeler consumers. The one-time uniform slab of 28% GST has been rationalized, leading to significant savings

The reduction in the GST rate from 28% to 18% on vehicles up to 350cc will make them considerably cheaper. However, premium motorcycles with engine capacities exceeding 350cc will now fall under the new 40% tax slab, which may result in a price increase for these models, even with the removal of the 3% cess. The concessional 5% GST on electric two-wheelers remains unchanged, continuing the government's push towards cleaner mobility

Price Cuts Across Segments, from Small Cars to Luxury SUVs

The four-wheeler market has also witnessed a significant overhaul in its tax structure. The earlier system, which involved a base GST of 28% coupled with a variable cess depending on the vehicle's category, has been replaced with a more straightforward two-tiered system for conventional vehicles.

Small and Mid-Size Cars: 

This category, which forms the bulk of passenger vehicle sales in India, is a major beneficiary of the GST 2.0 reforms.
 

As of the date of today, September 22, 2025, India's vehicle price dynamics have also seen a drastic change with the introduction of the GST 2.0 reforms. The new tax regime does away with the complexities of the old one by practically eliminating the extra cess and incorporating new GST slabs. This has brought significant cuts in prices across many varieties of two-wheelers and four-wheelers, as they become more accessible to customers. Here is a step-by-step analysis of the new GST rates and their effect on the final cost of your next vehicle.

Small and Mid-Size Cars, according to fuel category:

This category, which forms the bulk of passenger vehicle sales in India, is a major beneficiary of the GST 2.0 reforms.
 

Large Cars and SUVs:

Even the luxury and SUV segments will experience price reductions, as the removal of the high cess rates exceeds the increase in the base GST slab for many models.

Electric and Hybrid Vehicles:

The government continues to incentivize the adoption of greener vehicles with favorable tax rates.