New GST System: Cars, Mobile Phones, Computers May Get Cheaper
New Delhi, August 18, 2025: The Indian government is preparing for a major Goods and Services Tax (GST) overhaul, which may soon make cars, mobile phones, and computers cheaper. Prime Minister Narendra Modi recently termed the move a next-generation GST reform
aimed at boosting consumption and reducing the number of tax slabs.
What Will Change in the New GST Framework?
According to reports, the GST Council is considering replacing the existing four slabs with just two – 5% and 18%. Goods currently under the 12% and 28% brackets will likely shift to these categories.
- 90% of goods taxed at 28% may move to 18%
- Several items at 12% may drop to 5%
- A 40% sin tax will remain on tobacco and related products
Which Items Will Become Cheaper?
The biggest relief is expected for automobiles, electronic gadgets, and daily-use essentials. If implemented, here’s what may get cheaper:
- Passenger cars and two-wheelers (from 28% + cess to 18%)
- Mobile phones and computers
- Daily-use goods like toothpaste, cooking utensils, footwear, and readymade garments
- School supplies such as notebooks, stationery, and geometry boxes
Impact on Cars and Bikes
Currently, passenger cars attract a 28% GST + cess up to 22%, while two-wheelers are taxed at 28%. With the proposed changes, these vehicles may fall into the 18% slab, making them at least 10% cheaper. Electric vehicles, already taxed at just 5%, will remain unaffected.
Boost to Economy Expected
Analysts believe the reform could offset a revenue loss of ₹50,000 crore by significantly boosting consumption. The Nifty Auto Index already jumped over 4% in anticipation of cheaper vehicles.
Key Highlights:
- GST slabs to be reduced to 5% and 18%
- Daily-use goods and electronics to get cheaper
- Automobiles may see a 10% price cut
- Sin tax of 40% to remain on tobacco products
Final details will be announced in the upcoming GST Council meeting in September 2025.
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