**New GST Rates Now Effective: Are Fuel and Liquor Prices Dropping?**
*By Akash Pandey | September 22, 2025, 01:51 PM*
India’s indirect tax system is undergoing a major overhaul starting today, September 22. The 56th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman earlier this month, approved significant reductions in tax rates on goods and services. This decision impacts at least 375 items as part of an effort to boost the economy amid tariff uncertainties.
So, with these latest GST reforms, are prices of petrol, diesel, and alcohol expected to come down? Let’s find out.
### Tax Restructuring: Two GST Slabs Remain
The revised GST structure now has just two tax slabs—5% and 18%—down from the previous four. Nearly all goods that were earlier taxed at 12% have been moved to the lower 5% bracket. Similarly, about 90% of items under the highest 28% slab have been shifted to the 18% slab.
### Economic Impact: ₹2 Lakh Crore Injected into the Economy
Finance Minister Sitharaman stated that these GST reforms will inject approximately ₹2 lakh crore into the economy. This move is expected to leave consumers with more disposable income that would have otherwise been paid as taxes.
### Price Dynamics: Petrol and Diesel Prices Unaffected
It is important to note that petrol and diesel are not covered under GST. Their retail prices are influenced by multiple factors including central excise duty and state-level value-added tax (VAT). While excise duty is uniform across states, VAT rates vary, which explains the difference in fuel prices from state to state.
Although there have been discussions about bringing petrol and diesel under GST, states have opposed this move as they would lose significant taxation power and revenue.
### Alcohol Taxation: Will Prices Change?
Similar to fuel, alcohol prices will remain unaffected by the GST reform. Taxation on alcoholic beverages continues to fall under the jurisdiction of the states, which collect VAT on these products. Since alcohol sales contribute significantly to state revenues, it has been excluded from GST coverage.
If any state government decides to reduce VAT rates on alcohol, prices may decrease accordingly. Until then, the new GST rate revisions will not impact alcohol prices.
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In summary, while the new GST rate restructuring aims to lower taxes on a wide range of goods and services, consumers should not expect immediate relief on petrol, diesel, or liquor prices due to their exclusion from GST.
https://www.newsbytesapp.com/news/business/gst-2-0-now-effective-are-fuel-liquor-prices-going-down/story