New GST Reform: Which Everyday Products Like Cars, Phones, and Computers Will Become More Affordable?

Big changes are coming to India’s tax system, promising to make everyday products more affordable. In a recent announcement, the government revealed its plan to upgrade the Goods and Services Tax (GST) framework, aiming to simplify tax brackets and bring relief to millions of consumers.

As part of this new approach, tax brackets will be trimmed — with many goods moving to lower tax rates. For instance, a significant number of items that were earlier taxed at 28% may soon be taxed at 18%. Similarly, goods currently facing a 12% rate could drop to just 5%. The government says daily-use items will be included in this lowest bracket, making necessities lighter on your wallet.

A special “sin tax” category is set aside for products like tobacco, with rates as high as 40%. Only a handful of goods, mainly those that fall under this category, will pay this premium rate. Meanwhile, labor-intensive exports such as diamonds are expected to remain taxed at their current levels, and petroleum products will remain outside the new GST system.

Which Products to Expect at Lower Prices?

While the official list isn’t out yet, insiders suggest you could soon see price drops on a wide range of household items. Everyday necessities — from toothpaste and umbrellas to sewing machines, pressure cookers, and basic washing machines — are prime candidates. Bicycles, readymade clothes (above a certain price), footwear, vaccines, tiles, and farm tools may also be included.

The drive toward affordability doesn’t end there. Essential gadgets like mobile phones, computers, processed foods, stationery items, hair oil, and school supplies could all become easier to purchase. It’s a notable step forward as digital access becomes central in modern life.

India’s multi-layered tax system, meanwhile, will continue to exempt fruits, select grains, dairy products, and education-related services from GST, keeping these essentials tax-free.

Impact on Vehicles and Big-Ticket Items

One of the most eye-catching changes is for automobile buyers. Cars and bikes currently taxed at high rates (28% plus additional cess for many models) could move to the new 18% bracket. This shift means vehicles might be at least 10% cheaper. Electric cars, taxed at just 5%, remain the exception and will keep their low rate.

Other items likely to fall under the 18% category include televisions, refrigerators, air conditioners, and many building materials like cement and ready-mix concrete. However, luxury vehicles and select goods will still attract higher taxes.

These tax cuts are not just about making shopping cheaper — authorities hope this will drive spending and boost economic growth. India’s recent ratings upgrade by a global agency underscores growing confidence in the country’s financial health, lending weight to the government’s reform push.

In summary, the new GST will simplify taxes, make many consumer products more affordable, and potentially stimulate broader economic growth. All eyes are now on the upcoming GST Council meeting, where these changes will be finalized and the full list of affected goods released.