From September 22, consumers can expect lower prices on a wide range of goods and services as the government implements reduced GST rates on approximately 375 items. This significant change, described by Finance Minister Nirmala Sitharaman as a “Diwali gift” for the public, aims to ease the financial burden on the middle class and streamline business operations under the GST framework.

The new GST structure simplifies the tax system from four slabs to just two: 5% and 18%. A special rate of 40% will apply to select luxury and sin goods. Essential items such as ghee, paneer, butter, and various snacks will see a reduction in tax, making them more affordable. Additionally, daily-use products like shampoos, soaps, and face creams will also become cheaper.

Electronics, including air conditioners, washing machines, and televisions, will benefit from the new rates, while the GST on many medicines and medical devices has been cut to 5%. The government has instructed pharmaceutical companies to adjust their maximum retail prices (MRPs) accordingly to ensure consumers receive these benefits.

In the services sector, GST reductions will apply to salons, gyms, and yoga services, making these more accessible. Homebuyers will also gain from the reduced GST on cement, which has dropped from 28% to 18%, potentially lowering housing costs.

Major brands have already begun to pass on these savings. Hindustan Unilever has announced price cuts on products like Dove shampoo and Lifebuoy soap, while Amul has reduced prices on over 700 dairy products. The Indian Railways has also lowered the price of Rail Neer bottled water.

The automobile industry stands to gain significantly, with tax rates on small cars reduced to 18% from 28%. Companies such as Maruti Suzuki, Tata Motors, and Hyundai have announced price reductions on popular models, with cuts ranging from Rs 70,000 to over Rs 1.3 lakh.

Overall, this GST reform is expected to inject Rs 2 lakh crore into the economy, leaving consumers with more disposable income as they benefit from lower prices across various sectors.