What essential products are cheaper and costlier after GST rationalisation?

The Goods and Services Tax Council approved rate cuts for several food products, consumer electronics, products in the agriculture sector, renewable energy, textile, health and more on Wednesday (September 3, 2025). After the rationalisation, the GST system is now made of two rates – 5% and 18% – down from the four original rates of 5%, 12%, 18% and 28%. Besides the two rates, some products like sin goods and luxury goods are taxed at 40%. Revenue from these sectors will help support any shortfall in tax revenues to the States.

Here is a list of some essential products that have been included in rate changes.

While some apparel and clothing accessories above ₹2,500 attract a higher GST rate of 18% from 12%, others lower than that price continue to be taxed at 5%.

Essential cooking items like butter and cheese are taxed at 5%, down from 12%. Indian bread varieties like chapati, roti, paratha and khakhra are no longer taxed under GST with the previous 5% rate removed. Drugs and medicines for personal use are cheaper, attracting 5% tax from 12% earlier. Besides these drugs, 33 life-saving drugs are exempt. These attracted 12% tax rate earlier.

When it comes to the 40% slab, products like yachts, caffeinated beverages, pan masala, smoking pipes and others cost more, increasing from 28% tax rate.