A major adjustment to the Goods and Services Tax (GST) rates in India will take effect on Monday, September 22, impacting the financial landscape for everyday consumers. Following this update, the primary GST rates will be simplified to just two categories: 5% and 18%. Additionally, a special rate of 40% will be imposed on select items such as pan masala, cigarettes, and carbonated beverages.

Finance Minister Nirmala Sitharaman has clarified that many electronic goods commonly used by the middle class, including televisions and air conditioners, will fall under the 18% tax slab.

Items That Will See Price Reductions: Essential goods like packaged food, cooking oils, household cleaning products, and small electronic items (such as chargers and earphones) will become more affordable. In cities like Bengaluru, rides from app-based auto and cab services will also see a decrease in fares. Furthermore, medications for common ailments and medical equipment will be available at lower rates.

Items That Will Become More Expensive: Dining at restaurants, particularly in air-conditioned and premium establishments, will incur higher costs. Additionally, consumer durable goods like refrigerators and washing machines, along with salon and spa services, as well as premium smartphones, will also see price hikes.

Overall, while these changes are expected to ease daily expenses, the costs associated with dining out or purchasing household appliances may rise.

With the GST modifications, consumers should exercise caution, especially while shopping.

Confusion Ahead: Products manufactured before September 22 may display both old and new Maximum Retail Prices (MRP), potentially leading to overcharging by retailers.

Example: If a biscuit pack previously cost ₹50, under the new rates, it might be priced at ₹48, but some retailers may still sell it at the old price.

New Regulations: Companies are no longer required to advertise revised MRP in newspapers; they will simply send updated price lists to dealers.

Packaging Guidelines: Companies can continue using old packaging until March 31, 2026, but must indicate new prices through stickers or digital printing.

The Department of Consumer Affairs has issued guidelines regarding this matter. Therefore, it is advisable to carefully check prices while shopping to fully benefit from the GST reductions.