A new tax slab under GST 2.0 has come into effect in India from today. In the GST Council meeting held on 3rd September, it was announced that there will now be only two standard GST rates of 5% and 18%. The earlier 12% and 28% slabs have been removed. In their place, a new 40% slab has been added, which will apply to luxury goods. At the same time, many essential items have been made completely tax-free.
The new GST rates will now be applicable across the country. The biggest impact will be seen in the electronics sector. Air conditioners, refrigerators, washing machines, dishwashers, and large-screen TVs earlier attracted 28% GST, which has now been reduced to 18%. This will make these products cheaper and more affordable for middle-class families.
As for mobile phones and laptops, they will continue to be taxed at 18%, just like before. This means people waiting for a price drop in these items will have to depend on seasonal offers instead.
New GST Slabs
- 5% – Essential goods
- 18% – Household items and standard electronics
- 40% – Luxury goods
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Impact on Electronics and Household Goods
- Air conditioners and dishwashers may see a price drop of around ₹3,500–₹4,500 per unit.
- Refrigerators and washing machines are expected to become 8–9% cheaper.
- Large-screen TVs (above 32 inches) are also likely to see significant price cuts.
Mobile Phones and Laptops
The new GST slab does not affect mobile phones and laptops as they already fall under the 18% category. The reason is that mobile and laptop manufacturing companies are already availing benefits under the Production Linked Incentive (PLI) scheme. Also, after import duty adjustments, these items were kept in the 18% slab. Reducing the tax rate further would have led to revenue losses.