What are the current GST tax slabs in India for 2025?

After GST 2.0 reforms effective September 22, 2025, India operates five GST rate slabs: 0% (nil-rated and exempt goods/services such as fresh produce, health and education), 5% (essential goods including basic food items, medicines, and mass-transport services), 12% (processed foods, computers, and business-class transport), 18% (most standard goods and services including IT, financial services, and telecom), and a new 40% slab for luxury goods and sin goods (aerated drinks, tobacco, luxury vehicles) previously covered by a 28% rate plus cess. The exact slab for each item is determined by its HSN or SAC code

What items fall under the new 40% GST slab introduced in GST 2.0?

The new 40% GST rate introduced under GST 2.0 (56th GST Council recommendation, notified September 22, 2025) applies to luxury and demerit goods previously taxed at 28% plus compensation cess. Key items include: aerated beverages and carbonated drinks, tobacco products and cigarettes, luxury passenger vehicles above a specified engine capacity, high-end gambling equipment, and pan masala. The 40% rate effectively consolidates the erstwhile 28% rate and applicable cess into a single rate for most of these categories, simplifying the rate structure for businesses.

What is the GST rate on gold and jewellery in 2025?

Gold (including gold bullion and gold coins) attracts a GST rate of 3%, which has remained unchanged under GST 2.0. Gold jewellery made by a job-worker attracts an additional 5% GST on the making charges. Diamonds attract 0.25% GST. Platinum attracts 3% GST. These rates apply uniformly across CGST and SGST components. Importers of gold additionally pay IGST at the same 3% rate plus applicable Customs Duty.

What is the GST rate on health and life insurance premiums?

Health insurance premiums (including mediclaim policies) attract GST at 18%. Life insurance term plan premiums attract 18% GST. Life insurance endowment plan premiums attract 4.5% GST for the first year and 2.25% from the second year onwards. Unit-linked insurance plans (ULIPs) attract 18% GST on the premium component related to risk cover and charges. The 56th GST Council discussed potential reduction on health insurance, but no change was notified as of September 22, 2025 — continue to apply 18% until official notification.

What is the difference between nil-rated and exempt GST supply?

Nil-rated supplies are goods or services notified under GST with a 0% tax rate — they are taxable supplies but attract zero tax. A registered business can claim Input Tax Credit (ITC) on inputs used to make nil-rated supplies in certain cases. Exempt supplies are non-taxable supplies entirely outside the GST net — ITC is not available on inputs used for exempt supplies, and businesses must reverse proportionate ITC if they make both taxable and exempt supplies. Examples of nil-rated goods: cereals, fresh vegetables. Examples of exempt services: healthcare by hospitals, education by schools and universities.

How do I find the GST rate for my product or service using HSN/SAC code?

Visit the official GST portal at gst.gov.in and navigate to 'Services > User Services > Search HSN/SAC'. Enter your product description or HSN code (for goods) or SAC code (for services) in the search box. The system returns the applicable GST rate, the description of the heading, and any specific notifications that apply. Alternatively, search the CBIC website (cbic.gov.in) under 'GST Rate Schedules' for the latest notified rate charts. For complex classifications, consult a CA or tax professional, as incorrect HSN classification can lead to penalties under Section 122 of the CGST Act.

What GST rate applies to restaurants and food delivery?

Restaurants and food services attract GST at 5% without Input Tax Credit for standalone restaurants and air-conditioned restaurants that do not serve alcohol. Restaurants located within hotels with room tariffs above ₹7,500 per night attract 18% GST with ITC. Food delivery platforms such as Swiggy and Zomato are treated as 'restaurant service' suppliers under the GST e-commerce provisions — they collect and remit GST at 5% on restaurant orders. Packaged food items attract varying rates (0% for essential staples, 5% for branded items, 12% for certain processed foods) determined by the HSN code of the specific product.

What is the GST rate under the Composition Scheme for small businesses?

Under the GST Composition Scheme (available to businesses with annual turnover up to ₹1.5 crore for traders/manufacturers, ₹50 lakh for service providers), the applicable rates are: 1% of turnover for traders and manufacturers (0.5% CGST + 0.5% SGST), 5% of turnover for restaurants not serving alcohol, and 6% of turnover for service providers (3% CGST + 3% SGST). Composition dealers cannot collect GST from customers, cannot issue tax invoices, and cannot claim ITC. They file a single quarterly return (CMP-08) instead of monthly GSTR-1 and GSTR-3B returns.

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GST Rate Slab 2026: Complete List (0%, 5%, 18%, 40%) | Updated

Pragya Pathak

Author

Updated: 17-03-2026 at 3:30 PM

Serving Over

500K+ Users

On 1 July 2017, India implemented the Goods and Services Tax (GST), which amalgamated and complied with the tenets of numerous indirect taxes, such as VAT, excise duty, service tax, and entry tax into a single system for ease and transparency. By eliminating all these indirect taxes and unifying them into one, the government aims to reduce the tax burden that the people of India end up facing.

GST is a multi-stage, destination-based tax that is governed by the central and state governments. The system goes through regular revisions and amendments to keep it valid and updated over time. It consists of five main slabs: 0%, 5%, 12%, 18%, and 28%; however, with the new GST framework, these five slabs have been replaced with two main slabs and a separate slab for luxury and sin goods.

This article looks into the slabs and GST rate chart currently applied, examples of different sectors, cess on different slabs, and the overall structure of GST applied on various goods and services.

GST Overview

The table below summarises some key details about the revised GST rates along with other information that every Indian citizen should know.

Concerning	Revised rates in GST for the year 2025
Governing authority	Central and state government authorities
Replaced GST slabs	5%, 18%, and 40%
Components of GST	CGST. IGST, SGST, or UTGST
Is GST compensation cess still applicable?	Yes, but just on some specific luxury and sin goods, like tobacco, pan masala, luxury cars, etc.
Technological tools	Invoice Management System, online GST portal, etc.
HSN or SAC system	Used for classifying goods and services with applicable tax rates

What Are The GST Rate Slabs In India? (2025 Structure)

The Goods and Services Tax framework of India is a multi-tier slab system, which means that there are different tax rates based on the nature of various goods and services. Instead of having one single rate, the GST framework categorises goods and services into specific broad categories so that a slab rate can be assigned to them. This is done to ensure revenue generation without making taxes a burden for the taxpayers of India.

The GST slab rate system is not stable or fixed in any way; it keeps changing with time and with the dynamic needs of people. Recent changes were focused on reducing the five classification slab system to a three-tier classification system, mainly 5%, 18%, and 40% levied on luxury and sin goods. Businesses and individual taxpayers must understand all possible components of the GST slab rates, as they have the power to affect the finances of everyone. We will cover each rate slab and the goods and services that each slab covers in detail for one’s optimal and better understanding.

Complete GST Rate Slab Chart — Item-Wise (Goods & Services)

A detailed chart comprising GST slab rates for both goods and services is mentioned below in tabular format for one’s reference:

GST rate	Category	Goods	Services
0% (NIL)	Essential items	Fruits and vegetables, milk, eggs, bread, books, etc.	Education, healthcare, life, and health insurance services
3%	Precious items	Jewellery made of gold or silver	–
5%	Daily-use items	Packaged food, medicines, footwear, dairy products, etc.	Restaurants, transport services, etc.
18%	Most goods and services	Electronic items, construction supplies like cement, small automobiles, etc.	Telecom, banking, IT, and other services
40%	Luxury and sin items	Tobacco, cigarettes, luxury cars, aerated drinks, etc.	Casinos, online gaming, or lottery-related services

Detailed and comprehensive information on GST rates for the year 2025 on all kinds of goods is described below in detail for one’s clarity:

1. 0% GST Slab — Nil-Rated Goods & Exempt Services

Exempted essentials cover goods and services that support basic human sustenance or livelihood. It will also be exempt from GST taxes to achieve affordability for the average man.

Unprocessed food: Milk, curd, fresh fruit and/or vegetable, unbranded atta, and pure honey.
Agriculture products: Gaga, grains, pulses, rice, and jaggery.
Education and healthcare: Basic functions of work.
Specific goods: Eggs, paneer, lassi, handloom goods, and native standard instruments.

2. 5% GST Slab — Essential Goods & Daily Use Items

Items in this slab are taxed at the lowest rates, as they are everyday items and essential services. The aim is to keep these items affordable while raising revenue.

Edible items: sugar, tea/coffee, edible oils, fortified rice kernels (one RBIye), popcorn (not popped), life-saving drugs.
Transport and facilitation: non‑AC rail, economy air, LPG cylinders.
Utilities: coal, building stone, fibre goods.
Composition scheme: Some small taxpayers pay nominal rates (1.5%, 5%, 6%).

3. 12% GST Slab — Standard Goods & Processed Foods

The slab consists of intermediate goods and processed items that are not necessities, but commonly consumed goods. It reflects affordability and provides some taxation.

Processed foods and beverages: condiments, fruit juices, packaged pantry items.
Consumer goods: bicycles, contact lenses, surgical gloves, aluminium items for the household when a fan is required, and bamboo floor.
Specialised construction and agricultural inputs: granite blocks, nozzles for drip irrigation.

4. 18% GST Slab — Most Goods, IT Services & Financial Services

Most goods and services are in this standard slab, which is a normal slab in the GST structure. Consumption is moderating in this slab, which includes generally semi-luxury goods and essential services, but with value added.

Consumer durables: GST on mobile phones, TVs (<27”), washing machines, fridges, geysers, fans.
Food and beverage items: caramel‑coated popcorn, chocolate, packaged meals.
Services: dining in an AC restaurant, telecom, IT, staying in hotels (₹1,000–₹7,500 per night), business-class.

5. 40% GST Slab — Luxury & Sin Goods (New 2025 Rate)

This highest slab is for goods and services perceived to be non-essential, luxury items, or detrimental to society (and health). It acts primarily as a revenue collection stream, but also is a type of control mechanism to limit consumption following the government's wishes regarding behaviours. This particular slab now also includes the earlier 28% GST plus cess into a single and higher tax rate, with the hopes of decreasing their use or consumption by people. Examples of some items covered under this category are as follows:

Luxury items: vehicles (cars, high-end motorcycles), AC tiles, wall tiles, cement.
Sin goods: tobacco, aerated drinks, high-end appliances.
Entertainment/extravagant services: gambling, water parks, 5-star stays in hotels.

GST Rates On Services — Sector-Wise Breakdown

A detailed table comprising GST rates on all kinds of services provided in India is mentioned below:

Sector	Service	GST rate
Healthcare	All medical-related services	0%
Education	Education-related services	0%
GST rate on insurance	Premiums of various types of insurance, like health, life, and general	18%
Finance	Banking-related services, like loans, debit or credit card charges, etc.	18%
Telecom	Mobile, internet, DTH services	18%
IT	Software services	18%
Hospitality	Hotel rooms, restaurants (AC and non-AC), etc.	0 to 18%
Transportation	Railways (non-AC), air travel (economy and business class), and transportation of goods	0 to 12%
Real estate	Renting commercial or residential properties	0% for residential and 18% for commercial
Entertainment	Theatre tickets (high and low value), gaming tickets, casinos, etc.	12% for low-value tickets, 18% for high-value tickets, and 40% for gaming and casino tickets
Professional	Consultation by professionals, like CAs, etc.	18%
E-commerce	Platform services, commission charges	18%

GST 2.0 Reforms: What Changed On September 22, 2025?

The GST Next-Gen reforms were approved and introduced at the 56th GST Council meeting. The main aim of the September 22, 2025, GST changes was to simplify the existing taxation structure and improve people’s compliance with the set laws. Some key changes that were introduced are as follows:

The old 5 slab system. i.e., of 0%, 5%, 12%, 18%, and 28% got condensed into fewer categorisations, mainly into 5% and 18%, with a separate 40% slab for luxury and sin goods. This was done to simplify the structure so that people can understand the classification better.
Tax slabs set at 12% and 28% got replaced with new GST tax slab rates of 5% and 18% to avoid people’s doubts and confusion.
Goods such as tobacco, aerated drinks, luxury cars, and betting-related activities were shifted under the higher tax slab of 40%.
Many daily-use items, like medicines and other such products, were shifted to the 5% slab rate or completely exempted to make them affordable so that people from economic classes can purchase and consume them.
The authorities also focused on correcting the inverted duty structure, wherein raw materials were charged more tax than finished goods. This was done by the authorities to improve cost efficiency for the industrial sector.
In the 56th GST Council meeting, it was also decided that GST on life and health insurance will be reduced considerably so that more and more people can buy insurance coverage for themselves and their families.

Also Read: GST Frauds in India- Types, Penalties, Cases & How to Report (2025 Guide)

GST Cess: Which Items Still Attract Compensation Cess?

Following the updated GST framework, the GST compensation cess has been removed from most goods. However, the compensation cess continues to remain functional on certain luxury and sin goods to discourage their use or consumption by the people of India, as they are either imported from foreign countries or are health-degrading. Goods that still attract compensation cess are as follows:

Tobacco and related products, cigarettes, cigars, etc.
Pan masala
Aerated and sugary beverages
Luxury motor vehicles, like expensive cars, SUVs, etc.
Betting, lottery, and gambling-related activities

GST Rate On Gold, Insurance, Real Estate & More

As per the updated GST slab rates of 2025, GST rates were changed for various goods and services, including goods like gold, and services like that of the insurance sector and real estate, and more. Exact changes are laid down below for one’s better understanding:

GST rate on gold jewellery has a specific tax rate of 3% (1.5% CGST + 1.5% SGST) and 5% making charges, and precious stones are taxed at a specific rate of .25%.
Most types of insurance policies, like health, life, or general, continue to attract a GST of 18%. However, people can expect some relief as authorities are discussing and working on reducing those rates or introducing new government insurance schemes so that people can enjoy the essential benefit that insurance provides.
Under construction properties will be taxed at 1% (affordable housing) and others at 5% without Input Tax Credit. On the other hand, ready-to-move properties will remain exempt at 0%. Commercial properties and leasing of those properties will be taxed at 18%.
Tobacco, luxury cars, aerated drinks, and jet fuel have cesses applied at high rates - sometimes 200% cesses.

Regulatory Updates & Recent GST Council Items

Each GST Council meeting brings updates, which can impact consumers and businesses. Changes, even if slight, can lead to expanded structural consequences as well as rate. Here is what changed recently that is worth following for 2025.

Change Area	Description	Updated GST Rate / Reform
Used Vehicles	Sale of used vehicles by registered dealers now comes under GST; private sales remain exempt.	18% applicable from late 2024
Caramel Popcorn & Snacks	GST varies based on branding and packaging.	5% (unbranded), 12% (branded), 18% (caramel popcorn)
Disabled Persons' Retrofits	Retrofit kits for specially-abled individuals' vehicles are made more affordable by reducing the tax burden.	Reduced from 18% to 5%
Renewable Energy Devices	Solar cookers, water pumps, and sprinklers shifted to a higher tax category.	Increased from 5% to 12%
Healthcare Drugs	Cancer-related and life-saving drugs reassessed to reduce treatment costs.	Reduced from 12% to 5%
Aviation Turbine Fuel (ATF)	Aviation fuel is excluded from GST to protect state revenue autonomy.	Remains outside GST
Compliance Reforms	Digital integration of GSTR‑3B and GSTR‑1A to reduce discrepancies and set stricter return timelines.	New 3-year return filing limit from July 2025

GST Structure And Compliance

The GST framework of India operates on a dual model, wherein both the central and state government authorities charge and collect taxes. This structure is established and now maintained to ensure uniformity in tax collection across the country. To properly comply with all the tax laws, businesses and individual taxpayers are not just required to understand the tax rates, but also the underlying mechanisms and rationale behind setting those particular rates.

Tri-fold Dual Model

The dual structure ensures the allocation of revenue between the Centre and the States. GST is divided into CGST / SGST / IGST split:

Component	Full Form	Applicable On	Collected By	Tax Sharing
CGST	Central Goods and Services Tax	Intra-state supply of goods and services	Central Government	Shared only with the Centre
SGST/UTGST	State/Union Territory GST	Intra-state supply of goods and services	State/UT Government	Shared only with the respective State or UT
IGST	Integrated Goods and Services Tax	Inter-state supply & imports/exports of goods/services	Central Government (then apportioned)	Divided between the Centre and the destination State

Composition Scheme GST Rates For Small Businesses

The compositional scheme under the GST framework provides easier compliance for small businesses with lower annual turnover. Instead of following the traditional and usual GST system, eligible taxpayers following the criteria of the composition scheme can pay taxes at a lower rate based on their turnover. It is particularly beneficial for small businesses, manufacturers, and service providers who can function optimally with a predictable but lower tax liability.

The exact GST percentage based on the eligible business’s annual turnover amounts is as follows:

For traders with an annual turnover of up to Rs 1.5 crore, the applicable GST rate is set at 1% of turnover (0.5% of CGST + 0.5% of SGST).
In the case of manufacturers with an annual turnover of up to Rs 1.5 crore, the applicable GST rate is set at 2% of turnover (1% of CGST + 1% of SGST).
When it comes to restaurants that don’t serve alcohol, the applicable GST rate is set at 5% of turnover (2.5% of CGST + 2.5% of SGST).
For service providers with an annual turnover of up to Rs 5 lakh, the applicable GST rate is set at 6% of turnover (3% of CGST + 3% of SGST) as per Section 10 2(A).

Composition Scheme & Input Tax Credit

The composition scheme is aimed at easier compliance for small businesses with a lower turnover. Input tax credit avoids the cascading effect of taxation on business by allowing credit for input tax.

The composition scheme permits a business with a turnover of up to ₹1-4 crore to apply simple tax slabs (1.5%, 5%, 6%) for tax purposes. No input tax credit can be claimed.
Input tax credit (ITC) allows a business to take credit for Goods and Services Tax charged on inputs to reduce tax liability by reclaiming what it had to pay to suppliers. Exclusions apply to inputs that are themselves goods, like motor vehicles, outdoor catering, etc.

Technological Compliance

Digital technology and other such mandatory systems are extremely necessary for a more simplified, structured, and organised filing of GST returns. With the adoption of technological advances for various components and processes associated with GST filing, like registration, payment of tax, claiming refunds, etc., errors have been reduced, and the operations have become much faster and more efficient. E-registration and e-filing efficiency have assisted GST compliance and leakage mitigation, furthered by adopting online tools and automated systems, some of which are described below in brief for one’s reference:

One of the digital solutions is the Invoice Management System (IMS), a system that plays a significant role in Input Tax Credit (ITC) reconciliation. This technological system enables the generation of GSTR-2B, an electronic statement that shows eligible goods and services for which a person can claim ITC, all based on the filings made by the supplier. This not only reduces people’s dependency on manual record-keeping but also ensures that businesses claim ITC on eligible goods only.
Another technological measure is the E-way bill system, which has been made mandatory for half a decade to track goods for inter-state shipments exceeding Rs 50,000 in value. The E-way bill system has been working as a valid digital process since June 2018. It gradually reduced the need for physical checkpoints and delays when goods are in transit, and enhanced the overall transport-related aspect of goods across the country. The digital system also helps the authorities in smoothly tracking and noticing any discrepancies in the movement of the goods, if any, and catch people who are committing criminal activities to evade tax.

Historical Context & Effect

The Goods and Services Tax law in India was made possible through the 101st constitutional amendment for the unique structure of indirect taxes that existed before it. It has fundamentally changed the indirect tax landscape in India. Before the introduction of GST, the country followed a very distributed and unorganised tax structure wherein central and state governments imposed and charged various types of taxes. Because of so many taxes, the system was not only disorganised but also extremely burdensome for both individual taxpayers and business entities.

With the introduction of the GST framework, which combined a variety of central and state taxes into one simplified tax and has the same logistics for the movement of goods throughout India, the system became much more organised and efficient.

The One Hundred and First Amendment of the Constitution of India was introduced as a bill to amend and propose the Goods and Services Tax (GST) on 8 September 2016. Nationally, GST was rolled out starting July 2017. The main benefit that was unlocked after its implementation was the removal of extra indirect taxes, such as VAT, excise duty, service tax, entry tax, and others, into one unified mechanism.
One of the most visible impacts of the GST framework was the eradication of state border check posts, which was also the primary reason behind the delay in the transportation of goods from one state to another. Under the GST framework, digital systems, like e-way bills and the Invoice Management System, made their way into the country to improve and increase the speed of transporting goods to and from a state. Statistics show that it helped in reducing transportation times by around 20%, which not only combatted delays faced earlier but also reduced expenses that occurred because of it.

Beyond these technical aspects that came along with the Goods and Services Tax laws, the organised system helped and will help businesses in complying with all the tax-related laws of India. The focus of the government has changed significantly when compared to olden times; it is no longer about charging taxes but about reducing the tax liability of all the citizens and industries so that taxation can no longer be a burden on anyone’s shoulders or a barrier against optimal and sustainable growth and development. With frameworks like GST, the authorities aim to reduce the instances of tax-related criminal activities, like tax evasion.

How To Check GST Rate By HSN / SAC Code?

The classification of goods and services under the Goods and Services Tax (GST) framework is based on a separate system. HSN code GST rate (Harmonised System of Nomenclature) for goods and SAC code (Services Accounting Code) for services. The HSN system is accepted worldwide, but the SCN system is only accepted and applicable in India.

One can check the HSN code GST rate, or SAC code by following some extremely straightforward steps:

Step 1: Please visit the official website of the GST portal.

Step 2: Go to the search section and search for the ‘Search HSN or SAC code’ option.

Step 3: Now, one can enter the code if they are aware, or just type the name of the product or service they are looking for, after which the system will display the correct code with the applied GST rate.

One should know that from May 2025, businesses with an annual turnover of up to Rs 5 crore were mandated to report a 4-digit HSN code, while those businesses with an annual turnover of more than 5 crore rupees will be mandated to use a 6-digit HSN code.

Conclusion

India's GST framework is in a dynamic state, continuously evolving for the best balancing of efficiency, equity, and ease of doing business. With an intentional rate categorisation plan, increased technological usage, and government willingness to govern proactively, GST seeks to promote economic growth while providing public welfare. The ever-changing modifications and amendments are being made almost every year to ensure that the GST framework remains in line with the dynamic needs of the market and the people of India.

Looking ahead, there will be continued changes and amendments in the GST structure as per changing times and changing economic needs. Taxpayers have a responsibility to remain informed and compliant about all the related changes to the Indian taxation system, as the system cannot function properly without an adequate and correct understanding of it in people’s minds.

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