GST Council May Slash Tax on ACs, Eatables: Big Relief for Middle Class Ahead
Major GST Rate Cuts Likely This Month
The GST Council is set to meet later this July and may bring major tax relief to Indian households. The government is considering reducing the GST on several essential items currently taxed at 12%. These may be shifted to the lower 5% slab.
Air conditioners (ACs), which are now taxed at 18%, may also see a cut. The proposal, if cleared, could make daily-use items and popular appliances more affordable for the middle class.
Which Items May Get Cheaper?
Here’s a look at what might soon cost less if the Council approves the proposal:
| Item Category | Current GST Rate | Proposed Rate |
|---|---|---|
| Toothpaste, Soaps | 12% | 5% |
| Packaged Foods | 12% | 5% |
| Footwear, Stationery | 12% | 5% |
| Air Conditioners | 18% | 12% or lower |
| Household Utensils | 12% | 5% |
| Refrigerators, Mixers | 12%–18% | Possibly 5%–12% |
These changes could reduce prices by 5% to 10% across the board. It’s part of the government’s effort to rationalize tax slabs and boost consumption.
Why Now?
The 12% GST slab may be removed entirely. The aim is to simplify the system and help families facing rising living costs. Officials believe that making items cheaper could increase purchases, which might balance out revenue losses over time.
Finance ministry sources estimate that the government could lose ₹40,000 to ₹50,000 crore initially. But if people buy more, tax collections may stabilize.
The meeting will also review rates on industrial goods and capital items. However, the focus remains on household items used by millions of Indians.
Did You Know?
Air conditioners are taxed the same as luxury items like high-end electronics and branded watches.
Also read: Big GST Cut on Insurance in the Works: What It Could Mean for Your Premiums in 2025
What Happens Next?
The GST Council’s 56th meeting is expected before July-end. A formal list of items under review will be released soon. If approved, the rate cuts could be implemented within a month.
This move could be a political win too — with elections approaching, easing daily costs may boost public sentiment.
Bottom Line:
The middle class could soon enjoy lower prices on common items. ACs, soaps, food, and stationery may all get cheaper. Keep an eye on the GST Council’s final decision later this month.
