The festive season has started with a major tax reform. Beginning September 22, 2025, India’s Goods and Services Tax (GST) structure has been overhauled. The government has promised that this new system will make shopping easier for common citizens while simplifying tax compliance for businesses.
Instead of multiple confusing slabs, most goods and services are now grouped under 0%, 5% and 18%, while a few luxury items stay at 40%. This shift has already begun to affect prices across supermarkets, retail chains, and online stores.
Items That Get Cheaper
For middle-class families, the best news is that daily essentials are now taxed less. Here’s what will help reduce your monthly bills:
- Food and staples: Packaged milk, paneer, butter, and basic Indian breads like roti, paratha and khakhra are now either at 0% or 5%.
- Personal care products: Toothpaste, bathing soap, hair oil and shaving cream are moved down to the 5% bracket, making them more affordable.
- Dry fruits & juices: Items such as almonds, raisins, fruit juices and certain oils are also under lower tax slabs.
A homemaker in Delhi summed it up well: “Even if the savings are small, when you’re buying these items every week, it really adds up. This is a relief.”
Goods That Become Costlier
Not everyone is smiling though. Some categories have gone up in tax rates:
- Clothing above ₹2,500: Ready-made garments in this range now attract 18% GST.
- Luxury cars & high-end bikes: These remain under the highest 40% tax slab.
- Non-essential appliances: Decorative items and certain electronic goods also see higher rates in the 18% category.
So, if you were planning to buy branded clothes for Navratri or Diwali, your shopping budget might need a rethink.
Impact on Consumers
For everyday shoppers, the impact is mixed but largely positive. Daily groceries, personal care, and food staples have all become cheaper, reducing the burden on households already battling inflation.
However, consumers must be alert. Retailers may take time to update prices. If bills still show higher tax rates, customers should check invoices carefully and question sellers.
An analyst explained: “In the short term, prices may not drop instantly due to old stock and existing supply chains. But in a month or two, the benefits will be clearly visible.”
What It Means for Businesses
For businesses, especially small traders, this reform cuts down complexity. With fewer slabs, billing software and tax filing become simpler. Traders also expect fewer disputes with authorities, since classification of items is now more straightforward.
But large retailers dealing in luxury and high-end products will have to explain to customers why some items are suddenly more expensive. The festive sales season will test how companies handle these new realities.
Government’s Pitch
Prime Minister Narendra Modi described this change as a “GST Savings Festival” timed with Navratri. He said the new slabs would directly help the poor, middle class, youth, and small traders. Finance Minister Nirmala Sitharaman also highlighted that a simplified structure was a long-pending demand from industry.
Economists, however, advise caution. While the rate cuts may reduce prices, rising fuel costs and global inflationary pressures could offset some of the gains.
Final Thoughts
The GST reform of September 22 marks one of the most significant changes since the tax was introduced in 2017. By collapsing multiple rates into a simpler structure, the government aims to deliver clarity and relief.
For the common consumer, groceries and toiletries should now cost less. For the luxury buyer, high-end clothing and cars will pinch more. For businesses, compliance just got easier, though pricing strategies may need to be adjusted.
As the festive season rolls on, the true impact will be visible in markets and malls across India. One thing is certain: GST has entered a new chapter, and every shopper will feel the difference in their pocket.