GST in India is divided into different tax rate groups, which show the percentage of tax applied to goods and services. These groups are broken down like this:
- 0% GST: Essential goods and services that are exempt from GST.
- 5% GST: Goods and services of mass consumption.
- 12% GST: Standard tax rate for most goods and services.
- 18% GST: Applied to most non-essential and luxury goods and services.
- 28% GST: High-end luxury goods and certain services.
Additionally, there are special rates for specific products like precious metals (3%) and certain items such as ethanol or biofuels.
Key Changes in GST New Rate Slabs for 2025
In 2025, the government has introduced a few noteworthy changes to the existing GST rate slabs. Here are the updates:
1. Reduction in GST on Electric Vehicles (EVs)
As part of India`s effort to focus on sustainable growth and cut down on carbon emissions, the tax rate on electric vehicles has gone down from 18% to 5%. This change is meant to help more people buy electric vehicles by making them cheaper.
2. Lower GST on Food Items
To make it easier for people, some food items that used to have a tax of 5% or 12% will now have a tax of 0%. These are some of the common food products that are part of this change:
- Pulses
- Fresh fruits and vegetables
- Unprocessed grains
This move is expected to benefit lower-income households and ensure food security for a larger population.
3. GST on Healthcare and Education
In 2025, the government introduced a lower GST rate of 5% for health-related services such as medical equipment, hospital treatments, and medicines. Also, education services, which used to have a GST rate of 18%, are now completely free from GST, helping to make education more affordable in India.
4. Digital Services Tax (DST)
As more digital services become popular in India, the government has set a new GST rate of 12% for OTT platforms and other digital services. This decision is meant to make sure that big international tech companies, which are part of the Indian economy, pay their fair share of tax.
5. GST Rate on Real Estate
There have been some major changes in the real estate industry too. The tax rate for affordable housing projects has gone down from 8% to 5%. On the other hand, luxury homes and commercial properties still have to pay an 18% tax rate, and developers can get back some of the tax they paid on materials and services.
GST Rate Costlier Changes List 2025
The Impact on Different Sectors
1. Consumer Goods
The change in GST rates will affect consumer goods, especially because the tax on food items is being lowered. People will see the effect right away, as the cost of some essential products will decrease.
2. Electric Vehicles (EVs)
The government is trying to lower the GST on electric vehicles, which means EV makers will have to pay less tax. This should make electric vehicles cheaper and easier for more people to buy. Because of this, more people might want to buy EVs, which would help the companies making them and also be better for the environment.
3. Healthcare and Education
Lowering the GST rate on healthcare and education will help both the people offering these services and the people using them. Hospitals and schools may spend less on running their businesses, which might lead to lower costs for patients and students.
4. Real Estate
Lowering the GST on affordable housing projects is expected to boost this sector. With fewer taxes, homes will be cheaper for middle and lower-income people, and developers will see more demand for affordable housing.
5. Digital Services
For digital businesses, adding a 12% GST on OTT platforms and online services might make things more expensive for customers. But this extra tax money can help improve India`s digital infrastructure and services.
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Life Before vs After GST New Rate List in India 2025
Challenges and Criticisms of the Updated GST New Rate List
While the 2025 GST revisions bring a number of benefits, there are still some challenges that need to be addressed:
- Complexity in Classification: Classifying products and services into different tax groups is still difficult. Many businesses, especially small and medium-sized ones, find it hard to know which group their products belong to, which causes problems with following the rules.
- Impact on Inflation: Putting higher taxes on certain expensive items and services might cause prices to rise more, especially in areas where people spend money based on their choices.
Implementation Delays: The new tax rates are meant to make things easier, but when they are put into practice, it can take some time, which may cause confusion for both people and companies. 
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