GST Reforms 2025 Update: Mobile Phones, Insurance, and Telecom Services Under 18% GST

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Under GST 2.0, most standard goods and services now fall under the 18% slab. This rate is designed to cover products and services that are not essential but are part of everyday modern living. By keeping a single, broad slab for such items, the government has aimed for uniformity and reduced confusion.

Before and After: Standard Goods and Services Under GST 2.0

What Changed

• Mobile Phones: Earlier taxed at 12%, now under 18%. This means smartphones and feature phones will become slightly costlier, though the difference per unit may not be large for most consumers.
• Household Electronics: Items like TVs, washing machines, and refrigerators remain at 18%, so no price change here.
• Restaurants (non-AC): Earlier split between 5% and 12%, they are now taxed at a uniform 18%. This simplifies billing but also makes eating out in smaller, non-AC restaurants more expensive.
• Insurance Premiums & Telecom Services: Both remain at 18%, ensuring stability for recurring costs such as health insurance or mobile bills.

Why the 18% Slab Matters

The 18% slab is critical because it acts as the default category for most services and mid-range goods. It avoids overlaps and confusion from multiple earlier slabs. While some costs like dining and mobile phones may rise, the clarity of a single rate makes compliance easier for businesses.

For families, this slab covers lifestyle and utility services rather than essentials. The increase in restaurant and mobile costs may pinch urban consumers, but predictable rates bring transparency.

By consolidating services and standard goods under one slab, GST 2.0 reduces disputes and creates a simpler, cleaner tax structure. Businesses now spend less time on classification battles, and consumers face more transparent pricing.