18% GST: TVs, AC, Small Cars, Bikes Under 350cc To Cost Less Now

The Goods and Services Tax (GST) Council announced today that only two rates will remain from September 22 - 5 per cent and 18 per cent. There is a special rate of 40 per cent which will apply only to pan masala, cigarette, aerated water with added sugar, carbonated beverages, etc.

Ms Sitharaman said many items used by the middle class have been brought under 18 per cent. These include televisions, air-conditioners, and bikes under 350 cc.

"These reforms have a multi-sectoral and multi-thematic focus, aimed at ensuring ease of living for all citizens and ease of doing business for all," Ms Sitharaman's office said in a post on X.

Hon'ble Prime Minister Shri @narendramodi announced the Next-Generation GST Reforms in his Independence Day address from the ramparts of Red Fort.

Working on the same principle, the GST Council has approved significant reforms today.

These reforms have a multi-sectoral and... pic.twitter.com/NzvvVScKCF

— Nirmala Sitharaman Office (@nsitharamanoffc) September 3, 2025

Here is a more detailed explanation:

Petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length would move to 18 per cent rate from 28 per cent.

All cars larger than 1,200 cc for petrol and 1,500 cc for diesel will be charged at 40 per cent, the finance minister said.

All automobiles above 1,200 cc and longer than 4,000 mm as well as motorcycles above 350 cc, yachts and aircrafts for personal use, and racing cars will attract a 40 per cent levy.

EVs will continue to be charged at 5 per cent GST.

Other aspirational items have been moved under the 18 per cent slab. These include dishwashers, and monitors and projectors.

The GST rate on cement has been brought under 18 per cent from 28 per cent; tax on three-wheelers is also down to 18 per cent.