Business
GST Overhaul From September 22: All Your Questions Answered
New Delhi: The GST Council has rolled out one of the biggest reforms since the introduction of the Goods and Services Tax. From September 22, 2025, India will move to a simplified two-slab system of 5% and 18%, along with a special 40% rate for luxury and sin goods. Everyday essentials such as milk, paneer, and roti have been exempted, insurance has been made tax-free, and costs for construction and farming equipment are being reduced.
But big changes always come with bigger questions. What exactly gets cheaper? What stays the same? How will billing work if you have already made an advance payment? And what about services such as travel, insurance or e-commerce? To cut through the noise, here are answers to the most frequently asked questions on the new GST rates, explained in simpler language.
1. When do the new GST rates apply?
The revised GST rates will take effect across India on September 22, 2025. The only exceptions are tobacco products and gutkha, which will continue under the old regime until further notice.
2. What are the new slabs?
The tax structure has been reduced to two main slabs, which are 5% and 18%. A higher slab of 40% has been introduced for goods such as luxury cars, large SUVs, alcohol substitutes, betting, casinos and other high-end products.
3. What about food items?
Essential food items remain exempt from GST. This includes UHT milk, paneer, pizza bread, chapatti and roti. All of these will now carry no tax.
4. Are insurance policies included?
Yes, both life and health insurance are exempt from GST under the new system. This includes term insurance, ULIPs, family floater health policies and senior citizen health plans.
5. What happens if I supply goods before September 22 but bill after?
The tax rate will depend on the date of payment. If payment is made after September 22, the new rate applies. If it is made before that date, the old rate continues.
6. What about imports?
Imported goods will be taxed at the same GST rates as domestic goods, unless they fall under the exempt category.
7. Can I still use my old input tax credit?
Yes, the input tax credit already available in your ledger will remain valid and can be used to settle future tax liabilities.
8. What if my goods become exempt after September 22?
If your goods are moved to the exempt category after September 22, you will have to reverse any input tax credit claimed on such supplies.
9. Will e-way bills change?
No. The rules for e-way bills remain unchanged. Even if the GST rate changes while goods are in transit, the existing e-way bill will remain valid.
10. Are plant-based milk drinks covered?
Yes, plant-based milk products, including soya milk, will now attract a 5% GST rate.
11. Why a 40% slab for some drinks?
The 40% slab has been created to group similar beverages and avoid classification disputes.
12. What is the GST on medicines?
All medicines are now taxed at 5%, except those that are specifically exempt.
13. What about medical devices?
Medical devices are taxed at 5%, which is lower than earlier rates and is expected to reduce costs for patients and hospitals.
14. What about small cars?
Cars with petrol, LPG or CNG engines up to 1200cc and diesel cars up to 1500cc will now be taxed at 18% instead of 28%.
15. And bigger cars?
Large cars, SUVs and utility vehicles are placed in the 40% slab, as they are considered luxury items.
16. Motorcycles?
Motorcycles with engines up to 350cc will be taxed at 18%, while those above 350cc will attract 40% GST.
17. What about buses and trucks?
Buses and trucks will now be taxed at 18%, which is a reduction from the previous slab.
18. Agriculture equipment?
Agricultural machinery such as sprinklers, drip irrigation systems and harvesters are taxed at 5%, making them more affordable for farmers.
19. Why not exempt tractors?
Tractors have not been exempted because exemptions block input tax credit. Instead, they have been placed under a lower rate to reduce costs while preserving the credit chain.
20. Household items?
Common household items such as soaps, shampoos and talcum powders are taxed at 5%. Toothpaste, toothbrushes, and dental floss also fall under this category.
21. Electronics?
Consumer electronics such as air conditioners, dishwashers and televisions will now attract 18% GST. The 18% slab applies even to larger TVs.
22. Energy sector?
Renewable energy devices are placed under the 5% slab, while coal has been restructured so that there is no additional burden.
23. Hotels and travel?
Hotel rooms priced up to Rs 7,500 per night are taxed at 5%. Bus and train fares are also at 5%. Air travel attracts 5% in economy and 18% in business class.
24. Entertainment?
Casinos, betting and IPL tickets fall under the 40% slab. Other sporting events are taxed at 18% if the ticket price is above Rs 500.
25. What about cinema tickets?
Cinema tickets up to Rs 250 are taxed at 5%, while those above Rs 250 attract 18% GST.
26. How does GST change for education?
Education services such as school tuition remain exempt. Coaching classes and training programmes are taxed at 18%.
27. Will GST apply to hospital services?
Basic hospital services remain exempt, but certain value-added services inside hospitals may attract 18% GST.
28. What about telecom services?
Telecommunication services, including mobile and internet, are taxed at 18%.
29. How are financial services treated?
Financial services such as bank charges and processing fees continue to attract 18% GST.
30. What about insurance renewals?
Renewals of life and health insurance policies are exempt in line with the exemption for insurance products.
31. Is GST applicable on gold?
Yes. Gold jewellery and bullion are taxed at 3%, while jewellery making charges attract 5%.
32. What about real estate?
Under-construction flats are taxed at 5% without ITC. Affordable housing projects continue to enjoy concessional rates.
33. How does GST impact restaurants?
Standalone restaurants and those in hotels with tariffs below Rs 7,500 are taxed at 5%. Restaurants in higher-end hotels may be taxed at 18%.
34. Are services like cab rides affected?
Yes. App-based cab aggregators and regular taxi services are taxed at 5%.
35. What about railways?
Rail passenger fares are taxed at 5%, while freight services attract 12%.
36. How are airlines taxed?
Economy class tickets are taxed at 5%, while business class tickets are taxed at 18%.
37. What about tour packages?
Tour operator services attract 5% GST without ITC.
38. Is GST applicable on e-commerce?
Yes. Goods and services sold via e-commerce platforms are taxed at the same rates as offline products.
39. What about alcohol?
Alcohol for human consumption remains outside GST and continues to be taxed by states.
40. How is tobacco treated?
Tobacco products attract GST along with an additional cess, keeping them in the higher tax range.
41. What about petroleum products?
Petrol, diesel and natural gas are outside GST and continue under excise and Value Added Tax (VAT).
42. How is electricity treated?
Electricity supply remains exempt, as it is considered essential.
43. Are fertilizers covered?
Fertilizers are taxed at 5% to reduce costs for farmers.
44. What about seeds?
Seeds for sowing are exempt from GST.
45. How does GST apply to textiles?
Textiles fall under the 5% or 12% slab, depending on the product.
46. What about footwear?
Footwear priced up to Rs 1,000 is taxed at 5%. Above Rs 1,000, it is taxed at 18%.
47. Are cosmetics affected?
Yes. Cosmetics and beauty products attract 18% GST.
48. What about sanitary napkins?
Sanitary napkins are exempt from GST.
49. How are packaged foods taxed?
Packaged foods like biscuits, chocolates and snacks attract 18%. Unbranded staples remain exempt.
50. What about bottled water?
Packaged drinking water attracts 18% GST.
51. Are aerated drinks included?
Yes. Aerated drinks fall under the 40% slab.
52. How are sweets and confectionery taxed?
Most sweets and confectionery attract 18% GST, though unbranded mithai may remain exempt.
53. What about edible oils?
Edible oils are taxed at 5%.
54. How does GST affect fuel like LPG?
Domestic LPG is taxed at 5%, while commercial cylinders attract 18%.
55. What about kerosene?
PDS kerosene remains exempt.
56. Are books taxed?
Printed books are exempt from GST.
57. What about newspapers?
Newspapers and periodicals are exempt, but advertisements within them are taxed at 5% or 18%, depending on the medium.
58. How is stationery treated?
Stationery such as pens, pencils and notebooks is taxed at 12% or 18%.
59. What about printing services?
Printing of books and newspapers is exempt, while commercial printing attracts 18%.
60. Are digital services taxed?
Yes. Online subscriptions, streaming platforms and cloud services are taxed at 18%.
61. What about software?
Software products and services are taxed at 18%.
62. How are IT services treated?
IT consultancy and related services attract 18% GST.
63. Are exports covered?
Exports are zero-rated, meaning they are exempt from tax but still allow input credit.
64. What about SEZs?
Supplies to SEZs are also zero-rated.
65. How are imports handled?
Imports are taxed at the same rate as domestic supplies, in addition to customs duties.
66. Are charitable trusts exempt?
Charitable trusts remain exempt for their core activities, but commercial services are taxable.
67. What about religious services?
Religious services provided by places of worship are exempt.
68. How are government services taxed?
Most government services are exempt, but commercial activities by government bodies may attract GST.
69. What about lottery and betting?
Lotteries, betting and gambling are taxed at 40%.
70. Are second-hand goods taxed?
Second-hand goods are taxed only on the margin between purchase and resale price.
71. What about real estate resale?
Sale of ready-to-move-in flats or resale properties remains outside GST. Stamp duty and registration fees continue.
72. How are works contracts treated?
Works contracts, including those for government projects, are taxed at 18%.
73. What about transport of goods?
Goods transport by road is taxed at 5% without ITC or 12% with ITC.
74. How does GST apply to courier services?
Courier and logistics services are taxed at 18%.
75. What about financial markets?
Stockbroking, mutual funds and asset management services remain under the 18% slab.
Go Digit General Insurance on Saturday said it has received a demand notice of about Rs 170 crore for short payment of goods and services tax (GST) for nearly five years. The company has received an order copy from the Office of the Commissioner of GST & Central Excise, Chennai South Commissionerate on March 6, confirming GST demand of Rs 154.80 crore levying penalty of Rs 15.48 crore and Interest u/s 50 of CGST Act, 2017 for the period July 2017 to March 2022, the insurer said in a regulatory filing. The company is in the process of evaluating the legal advice on the implications and would file an appeal, it said.
Business
India–US trade ties: Piyush Goyal says India secured best deal among competing nations – The Times of India
Commerce and industry minister Piyush Goyal on Saturday said India has secured the best trade deal with the United States among competing nations, highlighting the strength of the economic and strategic partnership between the two countries, reported PTI.Speaking at the Raisina Dialogue 2026 in New Delhi, Goyal said India and the US share a “very powerful” relationship, adding that the world’s largest economy remains an important partner for New Delhi.
“It has been a fantastic journey. We have the best of relations. You would have observed that through the last year, President Donald Trump has always had the best things to say about India as a country, and about Prime Minister (Narendra) Modi. We have fantastic relations with our counterparts there.“Even within your family, sometimes you can have one or two misunderstandings. It’s a part of the course. I think it’s a very, very powerful relationship that the US and India share. And we got the best deal amongst all the nations with whom we compete,” Goyal said.He added that the two countries are strategic partners and the largest democracies in the world, noting that the US, with a $30 trillion economy, remains central to global trade.“We have a large responsibility cast on both our nations. They are the world’s largest economy, USD 30 trillion economy, nobody can wish them away,” he said.Explaining the significance of trade agreements, Goyal said such deals are meant to secure preferential access for a country’s goods and services compared to competitors.“What’s a trade deal? You are trying to get a preference or a preferential access for yourself, your goods, your services, compared to your competitor. And we got the best deal amongst all the competing nations. I mean whether it’s in our neighbourhood Pakistan or Bangladesh. If we look at the Asian region, we got the best deal amongst all of the competitors…” he said.The minister added that the India-US partnership extends beyond trade, encompassing technology cooperation, critical minerals, defence ties and investments.“There’s a huge technology overlay on it. There’s a huge critical minerals partnership, there’s a defense partnership, there’s a huge amount of investments that flow into India from the US. So it’s a partnership of two countries which is going to define the future,” he said.His remarks come as India and the US have finalised the framework for the first phase of a bilateral trade agreement, under which Washington had announced it would reduce reciprocal tariffs on India to 18 per cent.However, after the US Supreme Court struck down the tariffs, President Donald Trump imposed a 10 per cent tariff on all countries from February 24 for 150 days.A meeting between the chief negotiators of the two countries to finalise the legal text of the agreement has also been postponed.Under the proposed deal, India will eliminate or reduce tariffs on US industrial goods and a range of American agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits, among others.India has also indicated that it plans to purchase $500 billion worth of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over the next five years.Goyal also referred to the nine free trade agreements finalised by the Modi government, saying they were negotiated while safeguarding domestic interests.“These nine free trade agreements, I can say on record with all the courage that I have on my command with all the responsibility that in not a single trade deal, has India compromised on any sensitivity of any of our stakeholders,” he said.Opposition parties, however, have alleged that the government has compromised the interests of farmers in the India-US trade pact.Goyal said opening the auto sector under certain FTAs would expand consumer choice and create employment opportunities.“Demand for this industry is growing at an average of 8 per cent. So you can imagine how much more scope we have to create jobs,” he said.He added that while companies from FTA partner countries may initially export cars to test the Indian market, they would eventually need to manufacture locally once demand is established.“Initially they can sell, say, 5,000 cars or 10,000 cars, to test the market, find the distraction — and then come and manufacture here,” he said.He added that the government’s broader objective is to build a global network of trade partnerships through multiple FTAs.
A few years ago, Grace Guo began to crave places in New York City where hanging out with friends didn’t have to involve alcohol.
Newly sober and surrounded by friends who also chose not to drink, Guo said she wanted alternatives to the typical social scene. After some research, she landed on Bathhouse and Othership: social wellness clubs designed to create communities around improving health.
“Honestly, it kind of just feels like going to a spa together and spending an afternoon together. I think for me, it just feels much better rather than staying out late at night,” Guo told CNBC.
She’s one of a growing number of people seeking out membership clubs and other places that are structured around maintaining health while also acting as a spot to foster connection.
And those spaces are becoming booming businesses, too. Bathhouse, which opened in 2019 in Brooklyn, New York, told CNBC exclusively that it expects to hit around $120 million in revenue by the end of this year. It declined to disclose any of its other financials, as did Othership.
Many of these types of companies are privately held, but publicly traded gym chain Life Time also began doubling down on premium wellness a few years ago. While investors initially did not like that reallocation of resources, it’s now paying off, with Life Time’s stock more than doubling since October 2023.
Companies old and new are trying to reach consumers like Guo. The 31-year-old said she’s seen an increased focus on health, wellness and peacefulness in her own social life and in those around her, as she searches for so-called third spaces with that focus.
“I’m kind of like, where can I go to try to plug into a community, or where can I go to express a particular interest that I have and find like-minded people?” Guo said. “It’s finding a group of like-minded people, but then also having the space and the novelty to try something or to pursue something.”
At Othership, between spending time in the sauna and the cold plunge and choosing a popular evening time slot, Guo said the environment of health-focused socializing spoke to her.
“Having a space to go to where it kind of shocks us out of our routine and complacency is really important, and I think probably the biggest thing is just the fact that it overcomes a lot of the inertia of doing something,” Guo said.
‘Loneliness is an epidemic’
Bathhouse pools
Source: Bathhouse
The concept of third spaces isn’t new. The term was first coined by sociologist Ray Oldenburg in his 1989 book, “The Great Good Place,” to refer to spaces outside of the home, or the first place, and work, the second place, where people gather and form relationships.
That definition came to encompass places like neighborhood coffee shops, libraries, bars and more, where people from different backgrounds came together in an informal setting with relatively low barriers to access.
But somewhere in the past few years, that definition has evolved, and the importance of third spaces has blossomed.
Richard Kyte, a professor at Viterbo University in Wisconsin and the author of “Finding Your Third Place,” said he’s been teaching courses on third places for nearly two decades, but only noticed the term becoming mainstream in the past few years.
That turning point, Kyte said, also coincided with the pandemic, which sent the world into lockdowns and practically eliminated social gatherings for a period while redefining them for the long term.
“During that time, all of a sudden, we were talking more about the cost of loneliness, the cost of social isolation. It really came home to us during the pandemic that this was not healthy,” Kyte told CNBC. “And at the same time that we were noticing that we need these places more, we were seeing that so many of them were closing. That kind of spurred a renewed interest.”
It’s a trend that’s also been compounded by an increasingly digital-forward society, he added, as younger generations crave more than just social media connections even with the rise of artificial intelligence and chatbots.
“We’ve got all of this huge investment in technology that increases the ease and desirability of being independent,” Kyte said, citing AI companies promoting products that pose as friends. “When we have people turning more to their screens instead of looking to find fulfillment through social interaction, it just takes all these people out of the pool.”
According to Cigna’s 2025 “Loneliness in America” report, 67% of Gen Zers reported feeling lonely, along with 65% of millennials. A 2024 Harvard survey found that 67% of adults feel social and emotional loneliness because they are not part of meaningful groups.
Harry Taylor first founded Othership alongside his wife and friends to create a space that incorporated the wellness trend while combating that isolation.
“We understand that there’s a huge market for people to meet other people. Loneliness is an epidemic right now,” Taylor told CNBC. “We realized, just through doing this, it has the capacity for people to come together and just be themselves, be vulnerable.”
What’s old is new
Third spaces have evolved to encompass specific purposes, justifying the price tag that often comes with them, since some membership clubs can thousands of dollars per month.
Wellness, specifically, has seen a recent boom, becoming one of the top categories for gifting items last holiday season. Equinox chairman Harvey Spevak told CNBC last month that “health is the new luxury,” with the global wellness market expected to reach nearly $10 trillion by 2030, according to estimates from the Global Wellness Institute.
Bathhouse, which operates roughly 90,000 square feet of facilities in New York City, offers a wellness experience based on the bathhouse legacy of Europe. The space has saunas and cold plunges, both guided and unguided, starting at $40 for a drop-in session. The company’s two New York locations see roughly 1,000 customers each day.
“It was really apparent that there was no bathhouse-like concept that was really oriented towards a modern consumer, especially not in America,” co-founder Travis Talmadge told CNBC.
Talmadge said he and his co-founder were focused on creating a human experience, tapping into each person’s body while also building community around the shared activities.
“Our spaces are really large scale, so one of the nice things is that everybody kind of feels like a background actor on set, where there’s just so many people moving around,” Talmadge said. “You can have this really personal time, either by yourself or with somebody else, but then you’re in this environment with a lot of people doing the same thing.”
Talmadge said the company has seen a “surplus of demand” and runs at a “very healthy margin,” with plans to open seven more locations through 2027.
It’s just one of many wellness spaces growing in popularity.
Othership is also tapping into a wellness mindset, incorporating practices from various cultures to address the “physical, mental emotional and spiritual.” It has locations in New York and Canada, with plans for more growth.
At Othership, members can choose between three options: a free-flow session, designed to allow members to use the space however they want; classes, which alternate between saunas and cold plunges with group-led activities; and socials, imitating clubs without the alcohol in an effort to be present.
Co-founder Taylor said through Othership, he’s seen customers form new friend groups, propose to their partners in the sauna and find belonging with others while also fueling their own health.
Creating alcohol-free spaces was one of the Othership founders’ aims when creating the vision. Othership now hosts comedians, live musicians and more at its saunas to mimic similar spaces seen in big cities that are often associated with alcohol.
“There’s so much social media, which gives us the false perception that there’s social engagement and interaction, but so many of us have experienced when we’re doomscrolling, it almost even does the opposite,” Taylor said. “There’s a void in the wake of that social satiation that we all require as humans, so it’s that coming together and just being so real with one another that really creates a deep sense of belonging.”
Building community
Glo30 skincare studio.
Courtesy: Arleen Lamba
Wellness communities can form in other ways, too. Glo30, a membership studio founded 13 years ago with locations across the country, offers personalized skincare treatments for members every 30 days, creating a schedule aligned with other members to foster community.
“Community building is a lot about not just getting the results and [feeling] good, but also being able to have a commonality on their experiences and share what they feel,” Glo30’s founder and CEO Arleen Lamba told CNBC.
While urban cities like New York and Los Angeles have seen a boom in wellness clubs, Lamba said her more than 100 locations represent the in-between, in places like Texas, Arizona, North Carolina and more.
Every Glo30 appointment is scheduled on the hour in each location to create more opportunities for social connection, Lamba said.
“As people come into the studio, people are also leaving the studio, and we recognize that they recognize each other, they would actually make new friends,” she said, adding that especially post-pandemic, the company has seen a growing number of social groups form in the treatment rooms.
Lamba said she’s seen the craving for social connection increase with the rise of social media, but that creating community can often happen in untraditional places, like Glo30. At the same time, that social interaction isn’t as “overwhelming” as other places like parties or big group events, allowing for intimate socializing, she said.
In the past two years, Lamba said the number of Glo30’s franchise units in development has grown 67.5% as it sees more demand for its services.
The boom of third spaces goes beyond wellness, too. Exclusive restaurant memberships, gyms, creative spaces, social clubs and more are gaining more popularity as consumers search for ways to build community outside of their houses and offices.
At Glo30, Lamba said she’s seen every type of customer base at the company’s locations, from families to girl groups to couples.
“The third space is interesting because it creates a true connection,” she said. “We get to be witness to someone’s life — their highs, their lows, their middles — and we are the constant, and that, to me, is what the third space is about: No matter what kind of day you had out there, good or bad or medium, this space belongs to you. And when you come to this space, people will know you, see you, appreciate you and be glad you’re there.”
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