GST 2.0: What Changes on 22 September — A Complete Guide for Consumers & Businesses
Simple explanation, what gets cheaper, what may cost more, tips for consumers and small businesses.
Introduction
On 22 September 2025 India’s much-talked-about GST rate rationalisation — popularly called GST 2.0 — comes into force. The government has simplified slabs and shifted many everyday items into lower tax brackets to make essentials more affordable, while restructuring higher-end items into clearer categories. This article explains the changes, who benefits, what to watch out for, and practical tips for shoppers and small businesses.
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| GST 2.0: Full list of products becoming cheaper and costlier from Sept 22, 2025. |
What the reform changes (in simple terms)
Core changes include moving many items into two principal slabs for general goods: 5% (markedly lower) and 18% (standard). Some items remain exempt or NIL, and a new high rate (for demerit/luxury goods) applies where specified. The aim is to simplify compliance, reduce cascading tax effects, and pass benefits to consumers.
Who the reform helps most
Households buying packaged foods, personal-care items and many daily-use products should see lower shelf prices. Farmers and buyers of agri-equipment will benefit from lower taxes on farming machinery and irrigation equipment. The middle-class may also get relief on certain consumer durables as some items move from 28% to 18%.
Key categories affected (practical list)
Likely cheaper from day one (examples)
— Packaged foods such as butter, ghee, cheese, biscuits, instant noodles, cornflakes and many branded snacks and ready-to-eat items, with rates moved to 5%.
— Personal care items like soaps, toothpaste and shampoos where applicable.
— Certain medical items and healthcare consumables that are now at lower or nil rates.
— Agricultural machinery, irrigation equipment and some farming inputs moved to lower slabs to reduce cost of farming.
Big-ticket appliances and vehicles9
— Several consumer durables that used to attract 28% now sit at 18%: air conditioners, many TV models, dishwashers and some small cars and two-wheelers (specified by engine CC). This can reduce prices noticeably for big-ticket purchases during festival sales.
Items that could cost more (or see no benefit)
— Luxury or sin goods may be subject to higher or specific rates; a special high rate can apply to certain products.
— Some items — e.g., mobile phones and laptops — may remain at the existing rate (no automatic cut). Also, final retail price depends on whether makers and retailers pass on the full benefit.
How the change is expected to be implemented
The government has issued official notifications and lists that clarify which HSN codes fall in which slab. Traders and manufacturers are required to update tax configuration and invoices. Large FMCG and retail companies have already started reissuing invoices at the new rates in some cases; many stores will display “GST rate reduced” labels during the first few days.
Practical tips for consumers
1. Carry a screenshot or invoice for important purchases
When buying white goods or cars during the transition, keep all invoices and compare the tax breakup. If a price reduction is promised because of a lower GST slab, ensure the invoice reflects the new tax rate.
2. Check branded-pack pricing
Some large brands might quickly pass on savings (e.g., dairy brands adjusting butter/ghee prices). Others may delay — so compare store-level offers and consider buying during the initial days when promotional discounts combine with rate cuts.
3. For online shoppers
E-commerce platforms should update their tax calculation engines. If you see discrepancies, raise a ticket with the platform and retain screenshots. The government has expanded consumer grievance options for GST queries to help resolve complaints.
Practical tips for businesses & small traders
— Update billing software/ERP and POS tax codes before the deadline. Test invoice generation to avoid failures or “invalid” message on paste-outs.
— Communicate with suppliers about input tax credit (ITC) handling — transitional rules may apply.
— Train counter staff to explain price changes and keep printed notice if your store passes on rate cuts.
Possible transition issues & how to handle them
Initial days can bring confusion: mismatched invoices, delayed system patches, or sellers not immediately passing the benefit. If you are a consumer with a genuine grievance, use the official consumer grievance channels (e.g., the government’s INGRAM portal) and also contact the seller first for rectification.
Final takeaway
GST 2.0 is designed to make essentials and everyday goods cheaper, simplify slabs, and encourage consumption. While many households will feel immediate relief on grocery and personal-care bills, the actual impact depends on timely pass-through from manufacturers and retailers. For big-ticket goods, the effect can be visible in the form of smaller price tags — especially during festival-season sales.
Sources & verification: Official government notification and public press releases; leading national economics and business outlets reporting the new rate lists and transition guidance. (See government PDF and major news coverage for HSN-level lists.)
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