India has four main GST rates since GST 2.0 took effect on September 22, 2025: 0%, 5%, 18% and 40%. Gold and jewellery are taxed separately at 3%, rough diamonds at 0.25%, and pan masala and tobacco stay at 28% until compensation cess loans are cleared.
Below: the full rate cut and hike list from the 56th GST Council meeting, item-wise rates by category, HSN code lookup, the health insurance exemption, and how to calculate GST on an invoice.
GST Rates in India: Current Tax Slabs
Four rates cover almost every good and service in India. A small number of items are taxed outside these, at niche rates the GST Council sets separately.
| Rate | Applies To |
|---|---|
| 0% (Nil) | Essential food items, healthcare essentials, individual health and life insurance, education materials |
| 5% | Daily essentials, packaged food, agricultural equipment, medical devices, apparel up to Rs 2,500 |
| 18% | Standard rate: most manufactured goods, electronics, small cars, professional services |
| 40% | Sin goods (aerated drinks, gambling) and luxury items (large cars, yachts, personal aircraft) |
| 3% | Gold, silver, platinum, and jewellery (HSN Chapter 71) |
| 0.25% | Rough and semi-processed diamonds and precious stones |
| 28% | Pan masala and tobacco products, pending a later-notified move to 40% |
GST 2.0: What Changed on September 22, 2025
The 56th GST Council meeting, held September 3 to 4, 2025, approved the biggest GST restructuring since the tax launched in 2017. CBIC notified the changes on September 17, and the new rates took effect from September 22, 2025.
The reform collapsed the old five-rate system (0%, 5%, 12%, 18%, 28%) into two main slabs, 5% and 18%, and added a new 40% de-merit rate for sin goods and luxury items. The 12% and 28% slabs were eliminated for almost every item that used to sit in them.
GST Rate Cuts: Items That Got Cheaper
These are the major category-wise rate reductions from the 56th GST Council meeting, all effective September 22, 2025.
| Category | Items | Old Rate | New Rate |
|---|---|---|---|
| Daily Essentials | Hair oil, shampoo, toothpaste, toilet soap, toothbrushes, shaving cream | 18% | 5% |
| Daily Essentials | Butter, ghee, cheese and dairy spreads | 12% | 5% |
| Daily Essentials | Pre-packaged namkeens, bhujia and mixtures | 12% | 5% |
| Daily Essentials | Utensils; feeding bottles, napkins and clinical diapers; sewing machines and parts | 12% | 5% |
| Agriculture | Tractor tyres and parts | 18% | 5% |
| Agriculture | Tractors; bio-pesticides and micro-nutrients; drip irrigation and sprinklers | 12% | 5% |
| Agriculture | Soil preparation, cultivation and harvesting machinery | 12% | 5% |
| Healthcare | Individual health and life insurance | 18% | Nil |
| Healthcare | Thermometer; medical grade oxygen; diagnostic kits and reagents; glucometer and test strips; corrective spectacles | 12-18% | 5% |
| Healthcare | 33 listed drugs and medicines | 12% | Nil |
| Healthcare | Faricimab, Pertuzumab, Ocrelizumab, Brentuximab Vedotin and similar specified drugs | 12% | 5% |
| Automobiles | Small petrol/CNG/LPG cars (up to 1200cc, 4000mm); small diesel cars (up to 1500cc, 4000mm) | 28% | 18% |
| Automobiles | Three-wheelers; motorcycles up to 350cc; goods transport vehicles | 28% | 18% |
| Education | Maps, charts, globes, pencils, sharpeners, crayons, exercise books, erasers | 5-12% | Nil |
| Electronics | Air conditioners; TVs above 32 inches; monitors, projectors, dishwashers | 28% | 18% |
GST Rate Hikes: Sin Goods and Luxury Items
A smaller set of categories moved up, mostly sin goods and luxury items now taxed at the new 40% de-merit rate.
| Category | Items | Old Rate | New Rate |
|---|---|---|---|
| Mining | Coal, lignite, peat | 5% | 18% |
| Sin Goods | Aerated waters; caffeinated and carbonated beverages; other non-alcoholic beverages | 18-28% | 40% |
| Sin Goods | Motor cars and hybrids beyond small-car thresholds; motorcycles above 350cc | 28% | 40% |
| Sin Goods | Personal aircraft; yachts and pleasure vessels; revolvers and pistols | 28% | 40% |
| Sin Goods | Casino, race club and IPL-style event admission; bookmaker licensing; betting, gambling, lottery | 28% + ITC | 40% + ITC |
| Paper | Dissolving-grade chemical wood pulp; papers and paperboards other than exercise-book paper | 12% | 18% |
| Textiles | Apparel and made-ups above Rs 2,500 per piece; quilted cotton products above Rs 2,500 | 12% | 18% |
Types of GST Rates: CGST, SGST, IGST and Composition Scheme
The rate you see on a price list is the combined GST rate. How it splits depends on whether the transaction crosses a state line.
| Transaction Type | Tax Charged | Example on 18% GST |
|---|---|---|
| Intra-state (within one state) | CGST + SGST, split equally | 9% CGST + 9% SGST |
| Inter-state (across states) or import | IGST, charged in full | 18% IGST |
Small businesses under the composition scheme pay a flat, lower rate on turnover instead of the standard rate, and cannot charge GST separately on invoices or claim input tax credit.
| Business Type | Rate on Turnover |
|---|---|
| Manufacturers and traders | 1% (0.5% CGST + 0.5% SGST) |
| Restaurants (not serving alcohol) | 5% (2.5% CGST + 2.5% SGST) |
| Other eligible service providers | 6% (3% CGST + 3% SGST) |
GST also has its own TDS and TCS rules, separate from income tax. TDS under Section 51 is 2%, deducted by government bodies on contracts above Rs 2.5 lakh; TCS under Section 52 is 0.5%, collected by e-commerce operators on sales through their platform.
0% GST Items: Nil-Rated and Exempt Supplies
Nil-rated items pay no GST at any stage. This covers most fresh, unprocessed food, and a range of healthcare and education essentials.
| Category | Examples |
|---|---|
| Fresh produce | Fresh vegetables, fruits, nuts, ginger and turmeric; tender coconut water; prasadam |
| Dairy and eggs | Fresh, pasteurised and UHT milk; curd; lassi; buttermilk; paneer; eggs; non-packaged honey |
| Grains and staples | Non-packaged cereals, flours, pulses; bread, roti, chapathi, paratha, khakhra |
| Healthcare | Medicines on the Annexure I list; blood components; contraceptives; hearing aids; sanitary napkins |
| Insurance | Individual health insurance; individual life insurance (term, ULIP, endowment); reinsurance of both |
| Education | Printed books; newspapers; maps, globes; exercise books; children's picture books |
| Handcrafted items | Earthen pots, clay lamps and idols; glass bangles; agricultural hand tools; khadi products |
| Miscellaneous | Indian national flag; salt; electrical energy; firewood and charcoal; passenger baggage |
5% GST Items: The Merit Rate
The 5% slab covers processed food, daily essentials, agricultural machinery, and healthcare equipment, most of it moved here from 12% or 18% under GST 2.0.
| Category | Examples |
|---|---|
| Processed food | Dried fruits and spices; jams and preserves; ice cream; namkeens and bhujia; packaged honey |
| Dairy and fats | Butter, ghee, cheese, dairy spreads; condensed milk; yoghurt; edible oils |
| Daily essentials | Hair oil, shampoo, toothpaste, toilet soap, shaving cream, toothbrushes |
| Apparel | Knitted or non-knitted clothing, footwear, and made-up textile sets up to Rs 2,500 per piece |
| Healthcare | Insulin and vaccines; diagnostic kits; thermometers; glucometers; stents and dialysis units |
| Agriculture | Tractors and tractor parts; drip irrigation systems; sprinklers; soil and harvesting machinery |
| Fuels | Bio-gas; kerosene under PDS; domestic LPG; EV chargers |
| Sugar | Sugar, jaggery, khandsari, molasses, sugar confectionery, cocoa and chocolate products |
18% GST Items: The Standard Rate
18% is the default rate. Most manufactured goods, electronics, machinery, and professional services are taxed at 18% unless a lower or higher slab specifically applies.
| Category | Examples |
|---|---|
| Electronics | Mobile phones, TVs, cameras, air conditioners, refrigerators, monitors, speakers, circuits |
| Automobiles | Small cars, motorcycles up to 350cc, three-wheelers, goods vehicles, auto parts |
| Construction | Cement; iron and steel products; tiles and ceramics; paints and varnishes |
| Metals and hardware | Locks, hand tools, cutlery, nails, screws, kitchenware, metal furniture fittings |
| Personal care | Perfumes, cosmetics, deodorants (outside the specified 5% daily-essentials list) |
| Machinery | Industrial engines, pumps, compressors, textile and food-processing machinery |
| Services | Most professional, business, transport, courier, and manufacturing job-work services |
| Apparel above threshold | Clothing and made-ups priced above Rs 2,500 per piece |
40% GST Items: Sin Goods and Luxury
40% is reserved for goods and services the government treats as non-essential or socially discouraged, plus genuine luxury items.
| Category | Examples |
|---|---|
| Beverages | Sugared aerated water; caffeinated drinks; carbonated fruit drinks and juices |
| Gambling | Betting, casinos, horse racing, lottery, online money gaming |
| Firearms | Revolvers and pistols |
| Large vehicles | Cars above the small-car threshold; motorcycles above 350cc; larger hybrids |
| Luxury transport | Yachts and pleasure vessels; personal-use aircraft |
Income Tax Calculator
GST is one part of your total tax picture. Check your income tax liability for FY 2025-26 under both regimes.
Special GST Rates: Gold, Diamonds and Pan Masala
A few items are taxed outside the four main slabs entirely, at rates the GST Council has kept separate since 2017.
| Category | Items | Rate |
|---|---|---|
| Precious metals | Gold, silver, platinum, precious metal-clad base metals | 3% |
| Jewellery | Jewellery and parts, goldsmiths' and silversmiths' wares, imitation jewellery, coins | 3% |
| Precious stones | Rough and sawn diamonds; other precious and semi-precious stones (unstrung) | 0.25% |
| Job work | Job work on diamonds | 1.5% |
| Pan masala and tobacco | Pan masala, cigarettes, biris, manufactured tobacco | 28% (pending move to 40%) |
GST on Health and Life Insurance: Individual vs Group
GST on individual health and life insurance dropped from 18% to nil, effective September 22, 2025. This covers every individual policy type: term life, ULIPs, endowment plans, and health policies including family floater and senior citizen plans, plus their reinsurance.
The exemption does not cover group insurance. A group health or life policy bought through an employer still carries 18% GST, since the Council's relief applies only to individual policyholders, not employer-sponsored group schemes.
| Policy Type | GST Rate |
|---|---|
| Individual health insurance (including family floater, senior citizen) | Nil |
| Individual life insurance (term, ULIP, endowment) | Nil |
| Group health insurance (employer-sponsored) | 18% |
| Group life insurance (employer-sponsored) | 18% |
GST on Mobile Phones
Mobile phones are taxed at 18% GST under HSN code 8517 12 19. GST 2.0 did not change this: phones were already at 18% before September 2025, and the rate did not move.
Accessories bought separately, chargers, cases, and screen protectors, are taxed under their own HSN codes, most commonly also at 18%, but check the specific code rather than assuming it matches the phone's rate.
GST Rate by HSN Code: How to Find the Right Rate
Every good and service under GST is classified by an HSN (Harmonised System of Nomenclature) or SAC (Services Accounting Code) code, and the rate is legally tied to that code, not to the product's common name.
Search the official GST rate finder at cbic-gst.gov.in by item name or HSN code for the current rate. The 99 HSN chapters group goods from live animals (Chapter 1) through services (Chapter 99), and Notification 09/2025-CTR is the current legal schedule mapping chapters to rates.
Commonly Searched HSN Chapters
| Chapter | Covers |
|---|---|
| Chapter 30 | Drugs and pharmaceuticals |
| Chapter 71 | Pearls, diamonds, gold, platinum, jewellery |
| Chapter 84 | Industrial and household machinery |
| Chapter 85 | Electrical parts, electronics, mobile phones |
| Chapter 87 | Tractors and motor vehicles |
| Chapter 94 | Furniture, bedding, lighting |
| Chapter 99 | Services (mapped to SAC codes) |
Notifications That Implemented GST 2.0
CBIC issued a series of notifications on September 17, 2025 to give legal effect to the Council's decisions. These are the ones that matter for rate lookups and compliance.
| Notification | What It Does |
|---|---|
| 09/2025-CTR | Supersedes 01/2017-CTR; sets the new rate schedules (5%, 18%, 40%, plus niche rates) |
| 10/2025-CTR | Supersedes 02/2017-CTR; expands the exemption list for agriculture, food, health and education |
| 11/2025-CTR | Raises the rate on petroleum and coal bed methane operations from 12% to 18% |
| 12/2025-CTR | Updates the rate reference for used motor vehicles to the new schedules |
| 13/2025-CTR | Sets 5% GST on handicrafts (woodcraft, embroidery, pottery, glassware) and 3% on silver filigree work |
| 15/2025-CTR | Revises service rates: several services move to 18%, others (tailoring, job work) move to 5% |
| 16/2025-CTR | Inserts the individual health and life insurance exemption |
How to Calculate GST: Formula and Example
GST amount equals the taxable value multiplied by the applicable rate. The formula is the same regardless of which slab applies.
| Step | Amount |
|---|---|
| Taxable value | Rs 10,000 |
| GST rate | 18% |
| GST amount (10,000 x 18%) | Rs 1,800 |
| Total invoice value | Rs 11,800 |
| If intra-state: CGST 9% + SGST 9% | Rs 900 + Rs 900 |
| If inter-state: IGST 18% | Rs 1,800 |
To back-calculate GST already included in a price, divide the total by (1 + rate) to get the taxable value, then subtract that from the total to get the GST amount. On a Rs 11,800 GST-inclusive price at 18%, the taxable value is Rs 10,000 and the GST component is Rs 1,800.
Frequently Asked Questions: GST Rates in India
CAs and financial advisors can generate detailed Tax Optimization Reports for their clients at ca.fermor.in.
Disclaimer: GST rates are set by the GST Council and are subject to change through future notifications. Always verify the current rate for a specific item against its HSN code on the official GST portal (gst.gov.in) before filing returns or pricing invoices. Fermor is not a tax advisory firm.