New GST Applicability Date: What You Need to Know
India’s Goods and Services Tax (GST) has been simplified with a new slab structure and an official applicability date. This article explains the changes in simple language, highlights which items are affected, and tells you what to expect from 22 September 2025 onwards.
📅 When do the new GST rates apply?
The revised GST rates will take effect from 22 September 2025 (the first day of Navratri). The government announced the changes to simplify the tax structure and reduce tax burdens on many everyday goods and services.
🏷️ What are the key changes?
- Simplified slabs: The previous multiple-slab system has been reduced to two primary slabs — 5% and 18%.
- Special luxury/sin slab: A new 40% slab will apply to specific high-end and sin goods.
- Essential items: Many daily-use items, certain medicines, and health-related services will move to lower slabs or become tax-free.
- Tobacco & related items: Changes for tobacco, pan masala, gutkha and similar products have been deferred — they will continue under the existing tax and cess regime until further notice.
🚭 Tobacco, pan masala and the exception
Although the broad reform comes into force on 22 September 2025, the government has deferred the rollout of the 40% rate on tobacco, pan masala, cigarettes and related items. The deferment is linked to compensation cess liabilities and transitional arrangements; therefore, those product categories will follow the existing rates until a future notification.
📌 Why this reform matters
- For consumers: Reduced prices on medicines, health cover, many daily-use items and automobiles — improving household welfare.
- For businesses: Easier compliance, fewer tax categories to manage, and a more predictable tax environment.
- For the economy: Expected boost in consumption during the festive season and smoother supply-chain pricing.
✅ Quick summary
| Category | New GST Rate / Status | Applicability Date |
|---|---|---|
| Daily-use goods & essential items | 0% or 5% | 22 Sept 2025 |
| Most goods & services | 18% | 22 Sept 2025 |
| Luxury / sin goods | 40% | 22 Sept 2025 |
| Tobacco, pan masala, cigarettes | Existing rates (deferred) | To be decided |
