New GST slabs slash rates on essentials and personal care services, but food delivery charges go up
Major GST Reform Begins September 22
Urban households in India will begin to see notable savings on common services and daily essentials as the revised GST 2.0 (Goods and Services Tax) system comes into effect from September 22, 2025. The new structure reduces tax rates across multiple categories while streamlining slab complexity.
Aimed at reducing the tax burden on urban families, the reform brings more than 66% of household spending under 0% or 5% GST slabs, compared to just 50% before. However, it also introduces an 18% GST on food delivery charges, making some convenience services more expensive.
GST Slab Comparison: Before vs After (Urban Household Spending)
| GST Slab | Before Reform | After Reform |
| Nil (0%) | 32.3% | 32.9% |
| 5% | 18.2% | 33.3% |
| 12% | 10.8% | Removed |
| 18% | 16.9% | 14.1% |
| 28% and Above | 2.3% | 0.2% |
(Source: Thought Arbitrage Research Institute & FICCI)
What’s Becoming More Affordable
Here’s a breakdown of key items and services that will cost less starting September 22:
What’s Becoming More Affordable (Now Under 5% GST)
| Category | Items/Services |
|---|---|
| Personal Services | Salons, Gyms, Spas, Yoga centers (was 18% with ITC → now 5% without ITC) |
| Household & Personal Care | Soap, Shampoo, Toothpaste, Shaving Cream, Face Powder |
| Miscellaneous Products | Prescription Spectacles, Bicycle Parts |
This change will particularly benefit urban households who spend on grooming, wellness, and personal care products regularly.
What’s Getting More Expensive
While the new GST rates ease expenses in some areas, food delivery apps are now charging 18% GST on delivery fees, effective September 22.
What’s Getting More Expensive
| Category | Items/Services | New GST Rate | Impact |
|---|---|---|---|
| Convenience Services | Food Delivery Charges (Zomato, Swiggy, Magicpin, etc.) | 18% | ₹2–₹2.60 extra per order in most cases |
This added tax applies only to the delivery charges, not to the food items ordered.
Why GST 2.0 Matters
The government’s GST overhaul has two key objectives:
- Reduce the tax burden on the urban middle class
- Simplify the GST structure by eliminating mid-range slabs like the 12% category
The result? Consumers get:
- Lower costs on services like salons and gyms
- Cheaper access to daily essentials
- Higher charges for convenience services like food delivery
Quick Takeaways
- Cheaper: Salons, gyms, soaps, shampoos, shaving items, spectacles
- Costlier: Food delivery due to GST on delivery fees
- 12% slab removed for simplification
- More than 66% of urban spend now under nil or 5% slabs
From September 22, 2025, India’s updated GST 2.0 regime brings significant price relief to urban households. Services like salons, gyms, and yoga classes now attract just 5% GST, while personal care essentials like shampoo and toothpaste are also cheaper. However, food delivery will now come with an 18% GST on delivery fees, nudging up costs slightly for online orders. Overall, GST 2.0 is designed to cut costs on necessities while targeting higher taxes on convenience-based services.
Disclaimer
This article is based on GST reform data published by FICCI, Thought Arbitrage Research Institute, and official news sources. Changes are subject to final government notifications.
