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GST revamped: India replaces old 4-tier system with 2 rates
Big change alert—India is ditching its old four-tier GST system for just two simple tax rates: 5% and 18%.
Announced by Finance Minister Nirmala Sitharaman, this update kicks in from September 22, 2025, and is set to impact nearly everyone across the country.
Key changes, impact on prices
Most goods that used to be taxed at 12% will now drop to the lower 5% rate, while certain essentials are tax-free.
There's also a steep 40% tax on luxury or harmful stuff like tobacco.
The goal? Make things more affordable, boost spending (hello, festival shopping!), and give people some relief right before Diwali, Navratri, and Durga Puja.