**GST Rate Cuts Take Effect Tomorrow: What’s Getting Cheaper**
*By Akash Pandey | Sep 21, 2025, 03:39 PM*
The Goods and Services Tax (GST) Council’s decision to cut rates on nearly 375 items will come into effect from tomorrow, September 22. This move is set to make a wide range of products—including kitchen staples, electronics, medicines, and automobiles—more affordable for consumers across the country.
### Sectoral Impact: Price Cuts Expected Across Consumer Goods
The GST rate cut will benefit multiple sectors. Daily-use food items such as butter, namkeen, ketchup, jam, dry fruits, coffee, and ice cream are expected to become cheaper. Electronics like TVs, air conditioners, and washing machines will also see price reductions. Several FMCG companies have already begun revising their prices in anticipation of the lower tax burden on these products.
### Healthcare: Medicines to Become More Affordable
The healthcare sector stands to gain significantly. Most medicines, formulations, and medical devices—such as glucometers and diagnostic kits—will now attract a GST rate of 5%. This reduction is expected to ease medicine costs for households. Pharmacies have been directed to either revise maximum retail prices or sell medicines at rates reflecting the new lower tax.
### Construction, Automotive Sectors to Benefit
Builders and homebuyers will also benefit from the GST rate cut, with cement’s tax rate reduced from 28% to 18%. The automobile sector is among the biggest beneficiaries: buyers of small cars will now pay 18% GST, while bigger models will attract 28%, a notable reduction from previous rates. This move is expected to boost demand in the automotive market.
### Services: Tax Cuts for Everyday Services and Household Staples
The services sector will also see benefits. Salons, beauty parlors, yoga studios, gyms, and health clubs will now be taxed at 5% without input credit, down from the earlier 18% with credit. Household staples such as hair oil, soaps, shampoos, toothbrushes, and toothpaste are also expected to become more affordable due to the lowered tax rate.
### Simplified GST Structure: Moving to a Two-Rate System
Alongside the rate cuts, the GST Council has simplified the tax structure into a largely two-rate system — 5% and 18%. Ultra-luxury goods will continue to attract a higher tax of 40%, while tobacco and related products will remain in the 28% slab with an additional cess. This marks a shift from the current four-slab system of 5%, 12%, 18%, and 28%, simplifying compliance and rate management.
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Overall, the GST rate cuts coming into effect tomorrow aim to lighten the tax burden on consumers and businesses alike, promoting affordability and stimulating demand across various sectors. Stay tuned for more updates on pricing changes as companies revise their rates in line with the new GST norms.
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