GST on everyday items after GST 2.0
Updated 11 October 2026
GST 2.0, in force since 22 September 2025, cut the tax on most things a household buys. Soap, shampoo, toothpaste, ghee and butter moved to 5%, many basics became tax-free, TVs, ACs and small cars moved from 28% to 18%, and individual life and health insurance became fully exempt. A short list of luxury and harmful goods moved to a new 40% rate.
Groceries and food
| Item | Old rate | New rate |
|---|---|---|
| UHT milk | 5% | 0% |
| Paneer (pre-packaged and labelled) | 5% | 0% |
| Roti, chapati and other Indian breads | 5% (18% for paratha) | 0% |
| Butter, ghee and cheese | 12% | 5% |
| Namkeen and bhujia | 12% | 5% |
| Pasta | 12% | 5% |
| Chocolates | 18% | 5% |
| Coffee (instant coffee and extracts) | 18% | 5% |
Fresh fruit, vegetables, loose rice and similar unprocessed basics were already exempt and remain so.
Personal care
| Item | Old rate | New rate |
|---|---|---|
| Hair oil | 18% | 5% |
| Shampoo | 18% | 5% |
| Toothpaste | 18% | 5% |
| Toilet soap | 18% | 5% |
Health and insurance
| Item | Old rate | New rate |
|---|---|---|
| Individual health insurance (including family floater and senior citizen plans) | 18% | 0% |
| Individual life insurance (term, endowment and ULIP) | 18% | 0% |
| 33 lifesaving drugs | 12% | 0% |
| Most other medicines | 12% | 5% |
The insurance exemption covers individual policies. Group policies, such as those an employer buys for staff, are not covered by it.
Appliances, vehicles and home building
| Item | Old rate | New rate |
|---|---|---|
| Air conditioners | 28% | 18% |
| TVs above 32 inches | 28% | 18% (all TVs now 18%) |
| Dishwashers | 28% | 18% |
| Small cars | 28% plus cess | 18% |
| Motorcycles up to 350cc | 28% | 18% |
| Bicycles | 12% | 5% |
| Tractors | 12% | 5% |
| Cement | 28% | 18% |
Services
| Service | Old rate | New rate |
|---|---|---|
| Hotel rooms up to ₹7,500 a night | 12% | 5% (without input tax credit) |
| Salons, barbers and gyms | 18% | 5% (without input tax credit) |
The 40% rate and other increases
- Motorcycles above 350cc moved from 28% plus 3% cess to 40%.
- Readymade garments priced above ₹2,500 a piece moved from 12% to 18%. Those up to ₹2,500 are at 5%.
- Aerated and caffeinated drinks moved to 40%, replacing 28% plus cess, so the overall tax stayed high.
- Pan masala, cigarettes and tobacco stayed at 28% plus compensation cess until 1 February 2026, then moved to 40% (biris 18%) with an extra central excise on tobacco and a new Health and National Security Cess on pan masala.
- Larger cars moved to a flat 40% with no separate cess. Because the old cess came on top of 28%, the overall tax on many larger cars actually fell.
- Shampoo, pre-tax ₹300: old GST 18% = ₹54 (price ₹354); new GST 5% = ₹15 (price ₹315). Saving ₹39.
- Toothpaste, pre-tax ₹200: old ₹36; new ₹10. Saving ₹26.
- Ghee, pre-tax ₹1,000: old 12% = ₹120; new 5% = ₹50. Saving ₹70.
- Monthly saving on these three: ₹39 + ₹26 + ₹70 = ₹135.
- Family health insurance premium of ₹25,000 a year: old GST ₹4,500; new GST nil. Saving ₹4,500 a year.
- A TV costing ₹50,000 before tax: old 28% = ₹14,000; new 18% = ₹9,000. Saving ₹5,000.
Try your own numbers in the GST calculator.
What stayed the same
Not everything changed. Some common items and services kept their earlier rates:
- Mobile phones remain at 18%, as do mobile, broadband and DTH bills.
- Standalone restaurants still charge 5% without input tax credit, whether you dine in, take away or order through an app.
- Gold, silver and jewellery stay at 3%.
- Bank charges and most professional services stay at 18%.
- Fresh fruit, vegetables and unbranded loose staples stay exempt.
Petrol, diesel and alcohol are still outside GST, so their prices did not change because of GST 2.0.
Did shop prices actually fall?
A lower GST rate reduces the price only if the seller passes it on. Most large brands cut MRPs or added extra quantity, but check the bill: on a tax invoice, the GST rate and amount are shown separately. If a seller is still charging the old rate, you can complain through the National Consumer Helpline (1915). Remember that a price can also change for reasons other than tax, such as input costs.
The GST Council's 57th meeting on 8 October 2026 made no change to these slabs. For the full list of rates, see GST rates in 2026, and for how GST works, what is GST. Official details are in the GST Council press release on pib.gov.in and the rate notifications on cbic-gst.gov.in.