PM Modi Address to Nation Today: GST Bachat Utsav & New GST Rates List 2025

PM Modi Address to Nation: "GST Bachat Utsav" & New GST Rates List 2025 Announced

Q: Are the 28% and 12% slabs removed?

Most goods and services are now under two slabs: 5% and 18%. The 28% slab remains for luxury/sin goods. Items in 12% are reclassified to 5% or 18% as per policy notes.

Q: Did HSN codes change for all items?

No blanket HSN overhaul. Most items retain existing HSNs but have new rate mappings. Expect item-master cleanups and clarifications from CBIC/GST Council.

Q: From when are the new rates effective?

The new GST rates are effective from 22 September 2025. Invoices before this date follow old rates; invoices on or after use the new rates.

Q: How do we handle invoices spanning both periods?

Raise separate documents or split line items by tax period. Maintain pre/post-22 September summaries and ensure POS picks the rate based on invoice date.

Q: Any change in Input Tax Credit (ITC) rules?

No ITC rule overhaul was announced. Standard ITC conditions continue. Watch for CBIC circulars on transitional credit if notified.

Q: Do restaurants now have one rate?

Non-AC restaurants largely stay at 5% without ITC. Higher-end restaurants may have reduced effective rates as notified. Check official rate schedules.

Q: What about MRP/price stickers on packaged goods?

If the new rate changes consumer price, affix updated MRP stickers as per Legal Metrology rules, maintain records, and update retailer shelf prices.

Q: Any change to e-invoice threshold or schema?

No threshold change announced. Continue with existing e-invoice schema and IRN flow. Re-validate HSN, UQC and tax% after rate remap.

Q: Do GSTR-1 and GSTR-3B formats change?

Formats remain the same. Only the rate-wise reporting will reflect new slabs. Maintain period-wise working papers for audit trail.

Q: Are small traders/composition taxpayers affected?

Composition scheme remains the same, but purchase/sale rate changes affect pricing and margins. Update item masters, price lists and signage.

New Delhi • Updated: September 21, 2025, 8:00 PM IST

New Delhi: Prime Minister Narendra Modi addressed the nation live today in a speech lasting 28 minutes, launching the much-awaited GST Bachat Utsav.

Timing coincides with Tax Audit due dates and start of festive season.
From 22 Sept 2025, India moves to a simpler GST regime with 5% & 18% slabs.
Analysts see possible hints at global trade talks and H-1B visa policy direction.
Surprise: Modi officially launches GST Reform 2.0 for future-ready compliance.

🔥 Breaking: GST Reform 2.0 begins today! New rate slabs & compliance rules apply from 22 Sept 2025.

Key Highlights

Major Announcements from PM's Speech

GST simplification: Streamlined rate structure to reduce complexity and disputes.
Festival relief: Essentials and dining expected to be cheaper from Navratri Day 1.
MSME boost: Item-master clarity, better cash-flow and fewer return errors.

Impact Examples for Households

Sample household items showing potential savings under new GST rates effective September 22, 2025
Item / Service	Old Rate	New Rate	Likely Effect
Mixer-grinder (~₹1,000)	Higher slab	Lower slab	Save ~₹70
Family dinner (~₹2,000)	18%	Lower effective rate	Save ~₹100–₹120
Ready-made garments	12%	Lower effective rate	Festive price relief

"This is a festival of savings for every Indian and a push for self-reliant MSMEs."

Prime Minister's Key Statements

Top Quotes from the Address

"From tomorrow, the next-generation GST reforms will come into effect. It will be like a 'GST Bachat Utsav' for every family."
"Only 5% and 18% slabs will now remain for most goods—making daily-use items more affordable."
"These GST reforms will accelerate India's growth story and strengthen the ecosystem for MSMEs."
"Decorate every shop with Swadeshi. Let us give priority to goods made in India."
"Together with direct-tax relief, households could see a double bonanza beginning this festive season."

What Changes from Tomorrow

Measures Announced/Reiterated

Two-slab GST backbone (5% & 18%) for a large basket of goods and services; higher slab reserved for luxury/sin goods.
Compliance simplification: cleaned-up item/tax masters, fewer disputes, and simpler returns flow aimed at SMEs.
Consumer savings in everyday purchases during Navratri and beyond, driven by lower effective rates.
'Make in India / Swadeshi' push alongside reforms: prioritize domestically manufactured products.

Accountants: Action Items for 22 Sep 2025

Freeze item masters: Export Items/HSNs with old rates for audit trail
Update software:
- Tally Prime: F11 → GST → Update Tax Rate masters
- Busy/Marg: Install vendor patch or edit Tax Master
- SaaS tools: Bulk re-map price lists & items
Invoice templates: Ensure POS/B2B picks up new tax codes
Returns: Separate summaries for pre/post 22 Sep invoices
E-invoice validation: Re-validate HSN, UQC and tax %
MRP updates: Fresh stickers where applicable

Old vs New GST Rate Structure

Comprehensive comparison of GST rates before and after September 22, 2025 reforms showing impact on different product categories
Category	Old Rate	New Rate	Impact
Basic necessities Rice, wheat, salt, etc.	0%	0%	No change
Essential items Medicines, books, milk	5%	5%	Simplified classification
Daily use goods Soaps, toothpaste, tea	12%	5%	Major savings!
Processed foods Biscuits, namkeen, juice	12%	5%	Reduced burden
Garments Ready-made clothes	12%	5%	Festive shopping relief
Footwear Under ₹1000	5%	5%	No change
Mobile phones All smartphones	12%	18%	Moved to standard rate
Home appliances TV, fridge, AC	18%/28%	18%	Uniform rate
Restaurants Non-AC below ₹7500	5%	5%	No change
Restaurants AC/above ₹7500	18%	12%	Lower dining costs
Luxury items Cars, jewelry, etc.	28%	28%	No change
Sin goods Tobacco, pan masala	28% + Cess	28% + Cess	No change

🛒 Consumer Benefits from 22 Sep 2025

Immediate Savings on:

Daily essentials: Soaps, detergents, toothpaste (12% → 5%)
Food items: Packaged snacks, juices, biscuits (12% → 5%)
Clothing: All ready-made garments (12% → 5%)
Dining out: Mid-range restaurants (18% → 12%)

Example Savings:
• ₹1000 grocery bill: Save ₹70
• ₹2000 family dinner: Save ₹120
• ₹3000 clothing purchase: Save ₹210

FAQs: GST Reform 2.0 (Quick Answers)

Are the 28% and 12% slabs removed?

The reform centers most goods/services around two working slabs: 5% and 18%. The 28% band remains for luxury/sin goods (often with cess). The 12% band is largely migrated into the new structure, with specific items mapped down to 5% or up to 18% based on policy notes.

Did HSN codes change for all items?

No blanket HSN overhaul was announced. Most items will retain their existing HSNs but may carry a new rate mapping. Watch for item-master cleanups, clarifications, and a few reclassifications from CBIC/GST Council notifications.

From when are the new rates effective?

From 22 September 2025. Invoices dated before that follow the old rates; invoices on/after that date follow the new rates.

How do we handle invoices spanning both periods?

Raise separate documents or clearly split line items by tax period. Maintain pre/post-22 Sep summaries for audit. POS systems should pick the rate based on tax point/invoice date.

Any change in Input Tax Credit (ITC) rules?

No structural ITC overhaul was announced with the rate change. Standard conditions (valid tax invoice, receipt of goods/services, supplier compliance, etc.) continue.

Do restaurants now have one rate?

Mid-range restaurants see lower effective burden. Non-AC/normal eateries generally remain at 5%. Higher-end/AC categories may shift to a reduced effective rate.

What about MRP/price stickers on packaged goods?

If the rate change alters consumer price, affix updated MRP stickers as per Legal Metrology guidance, maintain records, and communicate shelf-price updates to retailers.

Any change to e-invoice threshold or schema?

No threshold change was announced with the speech. Keep e-invoice schema and IRN flow as-is. Re-validate HSN, UQC, tax% after the rate remap.

Do GSTR-1 and GSTR-3B formats change?

Formats remain the same. You’ll see an impact in rate-wise tables. Report supplies under the new slabs for transactions on/after 22 Sep.

Are small traders/composition taxpayers affected?

Composition basics stay intact. But purchase/sale rate changes affect pricing and margins. Update item masters, price lists, and signage.

Will consumers get refunds if they bought just before the cut?

No automatic refund under GST. Price protection (if any) is a seller policy. Future purchases should reflect the revised rates.

Why is this speech creating curiosity?

It coincides with tax-audit season and festivals, and hints at a larger ease-of-doing-business push.

⚠️ Disclaimer

This article is for information/education only. Not financial advice. Verify official notifications before acting. Watch the official stream on PMO India, DD News or NewsOnAir.

PM Modi GST Bachat Utsav 2025: New GST Rates, Key Highlights, Savings & MSME Benefits

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