GST 2.0: How Will It Impact Middle-Class Residing In Mumbai?

With effect from September 22, 2025, India’s revised Goods and Services Tax (GST) system introduces a streamlined structure with two primary rates—5% and 18%—and a 40% rate for sin goods. During a period when the festive spirits are high, check out how the revmaped GST will impact Mumbaikars, especially the middle-class. 

What’s Getting Affordable?

Daily Necessities

A range of everyday products will shift from the 12% tax bracket to the lower 5% slab, offering relief to household essentials. Items include:

• Personal care products like soaps, toothpastes, and shampoos
• Packaged foods such as snacks, biscuits, and fruit juices
• Dairy essentials like butter and condensed milk
• Affordable clothing and footwear
• Stationery and bicycles

This reduction could ease the financial burden on middle-class families, as small savings on daily purchases accumulate over time.

Home Appliances and Vehicles

Goods previously taxed at 28% may now fall under the 18% slab, reducing costs by up to 8%. Key beneficiaries include:

• Air conditioners and refrigerators
• Large-screen TVs and dishwashers
• Cement, vital for construction

Small cars (under 1,200cc engines) and two-wheelers

These cuts are expected to boost demand, potentially driving sales for companies like Maruti Suzuki and Hyundai. However, luxury vehicles will remain in higher tax brackets.

Also Read: PM Modi to visit Arunachal, Tripura on Sep 22; inaugurate multiple devel

Financial Services

There’s potential for insurance premiums, currently at 18%, to move to a lower slab or even gain exemptions, which could make policies more affordable.

What Will Get Costlier?

Certain products will face the steep 40% “sin tax” rate, including:

• Tobacco products and pan masala
• Sugary drinks and carbonated beverages
• Online gaming and betting platforms
• Luxury goods like diamonds

Petroleum products remain outside the GST framework, meaning no relief on fuel prices.