The Indian government has recently revised the Goods and Services Tax (GST) rates for various goods and services, impacting businesses and consumers alike. These updates aim to balance inflation, boost domestic industries, and enhance revenue collection. Some products and services are now more affordable, while others have become costlier due to increased tax rates. Here’s a detailed breakdown of the latest GST changes in 2025.
What’s Cheaper?
Several essential commodities and services have seen reduced GST rates in 2025. Here are some of the key items that have become more affordable:
1. Electric Vehicles (EVs) and Accessories
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The Indian government continues to promote electric mobility, reducing GST on electric vehicles and EV batteries from 5% to 3%.
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EV charging stations also benefit from a reduced GST rate of 5%.
2. Healthcare Products
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GST on life-saving drugs and essential medicines has been lowered from 12% to 5%, making healthcare more accessible.
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Certain medical devices, like insulin pumps and dialysis machines, now attract a lower 5% GST.
3. Renewable Energy Products
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Solar panels, wind turbines, and other renewable energy equipment now have a 5% GST rate, down from 12%.
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The reduction supports India’s push for clean energy adoption.
4. Handmade & Khadi Products
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To support artisans and rural industries, GST on handloom and khadi products has been reduced from 5% to 3%.
5. Education & Skill Development Services
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Online courses, e-learning platforms, and vocational training programs now attract 0% GST instead of 5%, making education more affordable.
What’s Costlier?
On the other hand, certain goods and services have witnessed higher GST rates to increase revenue collection and discourage non-essential consumption.
1. Luxury Goods & High-End Electronics
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Luxury cars, premium smartphones, and high-end electronics now attract 28% GST, up from 18%.
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Smartwatches and imported gadgets also face higher tax slabs.
2. Processed & Packaged Foods
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GST on instant food products, carbonated drinks, and packaged snacks has increased from 12% to 18%.
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This move aims to promote healthier eating habits.
3. Cigarettes, Tobacco & Alcoholic Beverages
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GST + Cess on tobacco and alcohol products has been raised significantly to curb consumption.
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The new GST rate on cigarettes has jumped from 28% to 40%, along with increased cess charges.
4. Online Gaming & Betting
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A major tax hike in online gaming and betting services sees GST rising from 18% to 28%.
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This is expected to regulate the industry and discourage excessive gambling.
5. Luxury Hotels & Air Travel
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GST on five-star hotels and premium travel services has been increased from 18% to 28%.
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Business-class airline tickets also see a GST hike, making high-end travel more expensive.
Impact on Consumers & Businesses
The revised GST rates in 2025 impact various industries differently:
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Consumers will benefit from lower costs on EVs, healthcare, and education but may face higher expenses on luxury goods and processed foods.
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Businesses in the renewable energy and e-learning sectors will gain, while those in luxury goods and gaming may experience reduced demand.
Conclusion
The latest GST rate changes in India (2025) reflect the government’s vision for sustainable growth, economic stability, and revenue optimization. While some essential items are now more affordable, luxury goods and non-essential services face higher taxes. Keeping track of these GST updates will help consumers and businesses make informed financial decisions.