What are the GST slabs in India now?

After the GST 2.0 reform that took effect on 22 September 2025, GST runs on four main slabs: 0, 5, 18 and 40 percent. Exempt essentials sit at 0 percent, most food and mass-use staples at 5 percent, the bulk of goods and services at 18 percent, and sin or luxury goods at 40 percent. The old 12 and 28 percent slabs were removed. Special rates of 3 percent on gold and silver and 0.25 percent on rough diamonds continue unchanged.

Do the 12 percent and 28 percent GST slabs still exist?

No. The GST 2.0 reform of 22 September 2025 removed both the 12 percent and the 28 percent slabs. Most items that were at 12 percent moved to 5 percent if they are essentials or to 18 percent if they are standard goods. Most items that were at 28 percent moved to 18 percent, while sin and luxury goods such as tobacco and luxury vehicles moved to the new 40 percent slab. If a source still lists 12 or 28 percent as current slabs, it is out of date.

How do I find the GST rate for a product?

The correct rate follows from how the product is classified, which is captured by its HSN code for goods or SAC code for services. Identify the right HSN code for your item, then look up the rate against that code in the official GST rate schedule or the rate finder on the GST portal. Rates can differ for similar-looking items based on branding, price, or use, so match the exact description rather than guessing from a broad category.

What is the highest GST rate?

The highest GST slab is now 40 percent, applied to sin and luxury goods such as aerated and sweetened drinks, tobacco and pan masala, luxury vehicles, motorcycles above 350cc, and activities like betting, casinos and online gaming. This single 40 percent rate largely replaced the old 28 percent slab and the compensation cess that used to sit on top of it. Most everyday goods and services a small business deals with sit at 18 percent or below.

Why do two similar products have different GST rates?

Because GST rates are tied to precise classifications, not loose categories. Two items that look alike to a shopper can fall under different HSN codes based on material, use, or even price, and each carries its own rate. Apparel up to 2,500 rupees a piece is taxed at 5 percent while the same kind of garment above that price is 18 percent. This is why matching the exact HSN code and the price condition matters, and why billing software that stores the right rate per item prevents costly mistakes.

GST Slabs and Rates in India (2026): The Full List (GST 2.0)

One of the first questions any Indian business asks about GST is simple: what rate do I charge? Since 22 September 2025 the answer has changed. On that date the GST 2.0 reform agreed by the 56th GST Council came into effect and replaced the old five-slab structure of 0, 5, 12, 18 and 28 percent with a simpler set of four main slabs: 0, 5, 18 and 40 percent. The 12 and 28 percent slabs were removed entirely. Get the slab right and your invoices are clean and your customers keep their credit. Get it wrong and you either overcharge customers or undercollect tax and face a shortfall later. This guide walks through each current slab with real example goods, explains how to find the rate for a specific product, and points out the price-based rules where GST rates most often trip businesses up.

What changed under GST 2.0

GST 2.0 was a rate-rationalisation reform. The government collapsed the old five-band structure into a cleaner set of slabs so that essentials are taxed lightly or not at all, most ordinary goods and services sit at a single standard rate, and only sin and luxury goods carry a high rate. In practice this meant two big moves. The 12 percent slab was removed, with its items pushed down to 5 percent if they are essentials or up to 18 percent if they are standard goods. The 28 percent slab was also removed, with most of its items dropping to 18 percent while genuinely luxury and sin goods went to the new 40 percent slab. The old compensation cess that used to sit on top of the 28 percent band was largely folded into that single 40 percent rate, so there is no longer a separate cess stacked on a 28 percent slab.

The 0 percent slab: exempt essentials

The lowest band is 0 percent, also described as exempt or nil-rated. It is meant to keep basic necessities and core public services affordable. Typical examples include:

Fresh food: fresh milk, fresh vegetables and fruit sold loose and unprocessed.
Unbranded staples: many staple foods when sold unbranded.
Stationery basics: notebooks and pencils.
Health and learning: many life-saving drugs, plus healthcare and education services.

The catch to remember is that branding and packaging can pull an otherwise exempt food item into a taxed slab, so the same commodity can be nil-rated loose and taxed once it is branded and packed for retail.

The 5 percent slab: food, medicines and mass-use goods

The 5 percent band covers widely used items where a low rate keeps them accessible. After GST 2.0 it is a broad band that took in many former 12 percent essentials. It typically includes:

Food and staples: most food items and packaged staples.
Medicines: a wide range of common medicines.
Apparel and footwear: clothing and footwear priced up to 2,500 rupees per piece.
Household and mobility: metal utensils and bicycles.
Farm and clean energy: agricultural machinery and solar equipment.

For a kirana or a small retailer, a good part of the shelf often sits in this band, which is why getting these rates into your billing correctly saves a lot of manual checking at the counter.

The 18 percent slab: the common standard rate

The 18 percent band is the workhorse of GST 2.0 and the rate a great many businesses deal with day to day. Most goods and services that are neither basic essentials nor luxury items sit here, and this band absorbed most of what used to be at 28 percent. Typical examples include:

Electronics and appliances: most electronics, air conditioners and televisions.
Building materials: cement and similar construction inputs.
Vehicles within thresholds: small cars within the engine and length limits, and motorcycles up to 350cc.
Higher-priced apparel: clothing and footwear priced above 2,500 rupees per piece.
Services: restaurants and hotel rooms priced above 7,500 rupees per night.

Because 18 percent is so common, some businesses assume everything is 18 percent and apply it by default. That is still a mistake, because an item that actually belongs at 5 percent will be overtaxed, and a sin or luxury item that belongs at 40 percent will be undercollected. The slab is decided by classification, not by habit.

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The 40 percent slab: sin and luxury goods

The top band is 40 percent, reserved for sin and luxury goods that policy treats as discouraged or premium. This single rate largely replaced the old 28 percent slab together with the compensation cess that used to sit on top of it. Typical examples include:

Sweetened drinks: aerated and sweetened beverages.
Tobacco and pan masala: cigarettes, tobacco products and pan masala.
Luxury and large vehicles: luxury vehicles and motorcycles above 350cc.
Gaming and gambling: betting, casinos and online gaming.

Most small businesses rarely touch this band, but if you deal in any product that might fall here, confirm the exact rate before you price it, because the numbers are large enough that an error is expensive. Note that human-consumption alcohol such as beer and spirits stays outside GST altogether and is taxed by the states through excise, so it does not carry a GST rate at all.

The slabs at a glance

Here is a simple summary of the current GST 2.0 bands and the kind of goods each typically covers. Always confirm the exact rate for your specific product against its classification, since categories overlap at the edges:

Two special rates sit outside this main structure and were left unchanged by GST 2.0: gold, silver and precious metals are taxed at 3 percent, and rough diamonds at 0.25 percent.

How to find the rate for a product

Finding the correct rate is a two-step process, and both steps matter:

Classify the product: identify the correct HSN code for a good, or SAC code for a service, based on its exact description, material and use. Our guide to the GST return filing process explains why this classification carries through to your returns.
Look up the rate: match that code to the rate listed against it in the official GST rate schedule, or use the rate finder on the GST portal. The rate follows the code, so once the code is right the rate is settled.

The reason to nail the classification first is that similar-looking items can carry different rates. Guessing from a broad category is how businesses end up on the wrong slab. To work out the tax amount once you know the rate, the GST calculator handles the arithmetic of adding or extracting GST from a price.

Price-dependent rates to watch

A distinctive feature of the current structure is that some items change slab based on their price, so the same kind of product can sit in two different bands. These are the ones that catch businesses out most:

Apparel and footwear: priced up to 2,500 rupees per piece they are taxed at 5 percent, and above that price the same kind of garment or footwear is taxed at 18 percent.
Hotel rooms: rooms priced above 7,500 rupees per night are taxed at 18 percent, while cheaper rooms fall in a lower band.

The practical lesson is that for these categories the price on the invoice decides the rate, so a shop selling a spread of price points needs the threshold built into how it bills rather than applying one blanket rate to the whole rack.

Where GST rates trip people up

A handful of recurring mistakes account for most rate errors. Knowing them in advance saves you from a reconciliation headache later:

Using old slabs: the 12 and 28 percent slabs were removed under GST 2.0, so any rate built on them is now wrong.
Missing the price threshold: apparel, footwear and hotel rooms switch slabs at a price line, so a flat rate misprices half the range.
Branded versus unbranded: the same food staple can be exempt loose and taxed once branded and packaged.
Defaulting to 18 percent: applying one familiar rate to everything overtaxes 5 percent items and undercollects on 40 percent ones.
Wrong HSN code: since the rate follows the code, a careless code picks the wrong rate automatically.

The practical fix for all of these is to set the correct rate once, at the item level, in your billing system. When each product carries its own stored rate, the person at the counter never has to remember a slab, and every invoice comes out consistent.

The bottom line

Since the GST 2.0 reform of 22 September 2025, GST rates in India run across four main slabs: 0, 5, 18 and 40 percent, with the 12 and 28 percent slabs removed and gold still at 3 percent. The right rate for any product is decided by its classification and, for a few categories, its price, not by habit or guesswork. Learn which band your goods fall in, confirm it against the HSN code, and watch the price thresholds on apparel and hotel rooms. IndiaCRM lets you store the correct GST rate against each item so every invoice applies it automatically, no counter-side guessing. See GST billing software, try the GST calculator, or get the mobile app and bill at the right rate every time.