Key points
- GST Council approves simplified structure with two slabs: 5% and 18%, effective 22 September.
- Government launches Savingwithgst.in to compare old vs new prices and estimate personal savings.
- Many daily-use items to get cheaper; some essentials kept tax-free.
- Example: “Milk Rs 60/L” shows Rs 63.6 under VAT vs Rs 60 under Next-Gen GST on the tool.
- Website hosted via MyGov; categories include food, snacks, kitchen, electronics, lifestyle.
- After 8 years, consumers to see direct, visible benefits; businesses to update POS and pricing.
New Delhi: At its 3–4 September meeting chaired by Finance Minister Nirmala Sitharaman, the GST Council cleared a major simplification of the indirect tax regime. The structure is being compressed to two slabs 5% and 18% with changes taking effect from 22 September. Authorities say the move targets lower prices for essentials and a cleaner rate map for businesses.
What gets cheaper
Consumers should see direct savings on several daily-use items as rates converge downward or move into the 5% bracket. Categories explicitly flagged for relief include packaged food items and common household goods. Retailers are expected to pass on the tax reduction via revised MRPs and billing from the effective date.
- Daily-use packaged foods
- Household staples such as soap, shampoo, toothbrush, toothpaste
- Tableware and bicycles now at 5%
Actual savings will depend on the product’s base price and how quickly retailers update labels and billing systems.
Essentials kept tax-free
Some items are outside the tax net to keep kitchen budgets in check. These remain without GST under the new framework:
- Ultra-high temperature (UHT) milk
- Pre-packaged and labeled chhena/paneer
- All Indian breads
These exclusions mean consumers should continue paying only the base price for these essentials.
Savingwithgst.in: how to check
To make the impact visible, the government has launched a comparison portal, Savingwithgst.in, via the MyGov platform.
- Browse categories such as food, snacks, kitchen, electronics, lifestyle.
- Select items you typically buy and add them to your cart.
- The tool displays three views: base price, “VAT-era” price, and “Next-Gen GST” price.
- The difference between the old and new columns shows indicative savings after the reform.
Example shown on the site: “milk, Rs 60 per liter” appears as “Rs 63.6 with VAT” versus “Rs 60 under Next-Gen GST,” illustrating the price gap when taxes are removed or reduced.
Why the change matters
Simplifying to two slabs is aimed at reducing classification disputes, easing compliance, and making invoices simpler to understand. For consumers, fewer slabs make price movements easier to track. For small businesses, the shift should reduce complexity in rate mapping and return filing.
What businesses should do now
- Update POS, invoicing, and ERP systems to reflect the new 5% and 18% rates by 22 September.
- Re-label MRPs where needed and communicate price changes at storefronts and e-commerce listings.
- Re-map product HSN codes to the new rates and update catalog/category tax settings.
- Train billing staff to avoid overcharging during the transition.
- Prepare notices to customers detailing revised prices and any pass-through timelines.
Quick savings snapshot
- Packaged food items: Lower effective price due to slab rationalization.
- Soap, shampoo, toothbrush, toothpaste, tableware, bicycle: Rate down to 5%, enabling price cuts.
- UHT milk, paneer/chhena, Indian breads: No GST, so base prices apply.
How much will you save?
Savings depend on your basket. Use the government’s calculator to build your typical cart and compare “old vs new” totals. Larger monthly savings are likely for families buying more packaged foods and household consumables that move into the 5% slab or zero-tax category.
