GST Rates in India 2025: Complete Slab-wise Guide
Reviewed by CA Nikhil Gupta · Last reviewed 5 September 2026
Following the September 2025 GST 2.0 reform, India's GST has three main rate slabs — 5%, 18% and 40% — alongside a 0% (nil) category for essentials and a few special rates (such as 3% on gold). The earlier 12% and 28% slabs were removed and the compensation cess was abolished. Knowing which rate applies to your product or service is essential for correct invoicing, ITC claims, and compliance. Here is the 2025 slab-wise reference.
The GST Rate Structure
GST in India operates under a dual structure — CGST (Central GST) and SGST (State GST) for intra-state supplies, and IGST (Integrated GST) for inter-state supplies. The combined (CGST+SGST) rate equals the IGST rate. The primary rate slabs are:
| Slab | CGST | SGST | IGST | Typical Goods/Services |
|---|---|---|---|---|
| 0% (Nil) | 0% | 0% | 0% | Essential food, healthcare, education, individual life & health insurance |
| 5% | 2.5% | 2.5% | 5% | Common-use goods, most food items, most medicines, hotel rooms up to ₹7,500/night |
| 18% | 9% | 9% | 18% | Most services, electronics and appliances, cement, small cars |
| 40% | 20% | 20% | 40% | Luxury & sin goods: large cars/SUVs, tobacco, aerated drinks, betting/gambling |
Zero-Rated / Nil GST: Key Items
The following are either exempt from GST or taxed at 0%:
- Food grains: Rice, wheat, pulses (unbranded/unpacked)
- Fresh vegetables and fruits (not processed or packaged)
- Milk, curd, lassi, buttermilk (unpackaged)
- Education services: Schools, colleges, approved vocational courses
- Healthcare: Clinical establishment services, ambulances
- Books and newspapers (printed)
- Eggs, meat and fish (unprocessed/fresh)
- Exports: Zero-rated (exporters can claim refund of input GST)
5% GST: Key Items
- Branded cereals, pulses, flour (packaged)
- Edible oils (refined, groundnut, mustard)
- Sugar, tea, coffee (not instant)
- Life-saving drugs listed by the government
- Economy class air travel
- Transport services (railways non-AC, road transport for goods)
- Fertilizers, agri equipment
- Renewable energy devices (solar panels, wind turbines)
Where the Old 12% Slab Went
The 12% slab was removed on 22 September 2025. Items that were at 12% were moved mostly to 5%, and some to 18%:
- Now 5%: processed/frozen foods; butter, ghee, cheese; most medicines; man-made-fibre textiles; hotel rooms up to ₹7,500/night
- Now 18%: computers and laptops; mobile phones
18% GST: Key Items
18% is the most common GST rate covering the bulk of professional services and industrial goods:
- Most professional services: CA, legal, consulting, IT services, banking (on fee component)
- Telecom services (DTH, broadband, mobile)
- Restaurants (non-AC/non-alcohol serving, not in starred hotels — Note: standalone restaurants typically at 5% without ITC)
- Electronics & appliances: televisions, refrigerators, washing machines, air conditioners, dishwashers (cut from 28% to 18% in GST 2.0)
- Paints, varnishes, adhesives
- Capital goods (industrial machinery), cement, iron & steel
- Small cars (petrol up to 1200cc / diesel up to 1500cc, length up to 4m) and motorcycles up to 350cc
- Hotels (room tariff above ₹7,500)
- Financial services (on fee/commission)
40% GST: Luxury & Sin Goods
GST 2.0 replaced the old 28%-plus-cess structure with a single 40% slab (no compensation cess) for luxury and demerit goods:
| Item | GST Rate |
|---|---|
| Large cars and SUVs (above the small-car limits) | 40% |
| Motorcycles above 350cc | 40% |
| Cigarettes, cigars, tobacco products, pan masala | 40% |
| Aerated / carbonated / caffeinated drinks | 40% |
| Casino, betting, gambling and online money gaming | 40% |
| Yachts and personal-use aircraft | 40% |
Small cars (petrol up to 1200cc, diesel up to 1500cc, length up to 4 metres) are taxed at 18%, not 40%. The compensation cess that earlier pushed the effective tax on cars to 29–50% was abolished on 22 September 2025.
GST on Services: Key Rates
| Service | GST Rate |
|---|---|
| Restaurant (standalone, non-AC) | 5% (no ITC) |
| Restaurant in hotel (room rate >₹7,500) | 18% |
| Hotels (up to ₹7,500/night) | 5% |
| Hotels (>₹7,500/night) | 18% |
| IT/Software services | 18% |
| Individual life insurance premium | 0% (exempt from 22 Sep 2025) |
| Mutual fund distributor commission | 18% |
| Rental of commercial property | 18% |
| Residential rent (to registered business) | 18% (reverse charge) |
| Individual health insurance premium | 0% (exempt from 22 Sep 2025) |
| Education (school/college) | Exempt |
Reverse Charge Mechanism (RCM): When the Buyer Pays GST
Under RCM, the recipient (buyer) pays GST instead of the supplier. Key RCM situations:
- Services from a Goods Transport Agency (GTA) — recipient pays 5% GST
- Legal services by an advocate to a registered business — recipient pays 18%
- Residential property rented to a registered business — tenant pays 18%
- Purchases from unregistered dealers above ₹5,000/day (in certain categories)
For GST registration requirements and ITC, see our GST registration guide and ITC reconciliation guide.
Frequently Asked Questions
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- Primary category
- GST & Indirect Tax
- Official starting point
- www.gstcouncil.gov.in
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