The GST Council, in its 56th meeting, announced a major revamp of the tax structure, shifting to a simplified three-tier system. The new framework includes 5 percent and 18 percent slabs, along with a 40 percent slab for luxury and sin goods. While this overhaul has brought relief for many household and consumer electronics, smartphone prices remain unchanged, dashing hopes of buyers expecting festive discounts.

Despite speculation, mobile phones continue to attract 18 percent GST, the same as before. Industry observers explained that any reduction to the 5 percent bracket was unlikely, given the large share of revenue that smartphones contribute to government collections. Some experts, however, argue that smartphones should be treated as a “necessity” and not a luxury item. “They are a necessity now, not just a gadget, and should ideally be taxed lower,” said one industry analyst.

The Council’s new structure, effective from September 22, replaces the earlier four-slab system of 5%, 12%, 18%, and 28%. It also removes cess on several items. Finance Minister Nirmala Sitharaman said the intent was to reduce the tax burden on consumers and boost demand ahead of Diwali and Navaratri.

While smartphones remain stuck at 18 percent, several consumer electronics are now cheaper. Large-screen TVs, refrigerators, washing machines, and air conditioners have all moved down from 28% to 18%, leading to price cuts. For example, ACs could become cheaper by ₹1,500–₹2,500, depending on the brand and model. Smaller TVs (32 inches and below) have dropped to the 5 percent slab, making them even more budget-friendly. Dishwashers too benefit from the reduction, which experts say could drive sales during the festive rush.

The reform’s impact extends beyond electronics. Hair oil, toothpaste, and kitchenware now attract just 5 percent GST, while life-saving medicines and insurance policies have been exempted entirely. These cuts are expected to provide direct relief to households and encourage spending.