GST & Indirect Tax
GST Rates in India 2025: Complete Slab-wise Guide
India's GST structure has four main rate slabs — 0%, 5%, 12%, 18%, and 28% — plus a compensation cess on certain luxury and demerit goods. 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 four primary rate slabs are:
| Slab | CGST | SGST | IGST | Typical Goods/Services |
|---|---|---|---|---|
| 0% (Nil) | 0% | 0% | 0% | Essential food, healthcare, education |
| 5% | 2.5% | 2.5% | 5% | Basic necessities, some food items |
| 12% | 6% | 6% | 12% | Processed foods, computers, medicines |
| 18% | 9% | 9% | 18% | Most services, electronics, industrial goods |
| 28% | 14% | 14% | 28% | Luxury goods, automobiles, tobacco |
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)
12% GST: Key Items
- Processed/frozen foods (meat, fish, juices)
- Butter, ghee, cheese
- Computers and laptops
- Medicines (most pharma)
- Mobile phones (below ₹10,000 value)
- Business class air travel
- Hotels (room tariff ₹1,000–7,500 per night)
- Textiles (manmade fibre fabrics)
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: TVs above 32 inches, refrigerators, washing machines, AC
- Paints, varnishes, adhesives
- Capital goods (industrial machinery)
- Hotels (room tariff above ₹7,500)
- Financial services (on fee/commission)
28% GST + Compensation Cess
The 28% slab applies to luxury and demerit goods. Many items in this slab also attract an additional Compensation Cess:
| Item | GST Rate | Compensation Cess | Total |
|---|---|---|---|
| Small cars (petrol <1200cc) | 28% | 1% | 29% |
| Small cars (diesel <1500cc) | 28% | 3% | 31% |
| Mid-size cars (1200cc–1500cc petrol) | 28% | 15% | 43% |
| Large cars / SUVs (>1500cc) | 28% | 22% | 50% |
| Cigarettes | 28% | Up to 290% | Very high |
| Pan masala | 28% | 60% | 88% |
| Coal | 5% | ₹400/tonne | 5% + cess |
| Aerated drinks | 28% | 12% | 40% |
| Luxury goods (watches >₹25,000, handbags >₹1 lakh) | 28% | Varies | 28%+ |
GST on Services: Key Rates
| Service | GST Rate |
|---|---|
| Restaurant (standalone, non-AC) | 5% (no ITC) |
| Restaurant in hotel (room rate >₹7,500) | 18% |
| Hotels (₹1,000–7,499/night) | 12% |
| Hotels (>₹7,500/night) | 18% |
| IT/Software services | 18% |
| Insurance premium (life insurance) | 18% on risk portion |
| Mutual fund distributor commission | 18% |
| Rental of commercial property | 18% |
| Residential rent (to registered business) | 18% (reverse charge) |
| Health insurance premium | 18% |
| Education (school/college) | Exempt |
⚠ GST rates change frequently via GST Council notifications. Always verify the rate applicable to your specific product/service (using the HSN code for goods or SAC code for services) on the official GST portal (gst.gov.in) before invoicing. This table reflects rates as of June 2026 but may not capture the most recent Council decisions.
Calculate GST payable on your invoiceUse our GST calculator to quickly compute the tax amount and breakdown for any transaction.
Open GST Calculator →
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
What GST rate applies to freelance/consulting services? ▼
Most professional and consulting services — IT, management consulting, marketing, design, legal advice, CA services — attract 18% GST. If you're a freelancer or consultant registered for GST, you must charge 18% GST on your invoices to clients and file it as output tax. You can claim ITC on GST paid on your business expenses (laptop, software subscriptions, office rent). If your annual turnover is below ₹20 lakh (₹10 lakh in special category states), you are not required to register for GST and don't need to charge it.
Is GST applicable on rental income from residential property? ▼
If you're an individual renting out your home to another individual tenant, GST is not applicable — it is a purely personal transaction. However, if a GST-registered business rents a residential property for use as an office or for accommodation for its employees, GST at 18% applies under the Reverse Charge Mechanism — meaning the registered business (tenant) must pay the GST, not the landlord. Commercial property rentals always attract 18% GST regardless of the tenant type.
What is an HSN code and why does it matter for GST? ▼
HSN (Harmonised System of Nomenclature) is a 6-8 digit code that classifies goods for GST purposes. Every goods invoice must mention the HSN code of the product, which determines the applicable GST rate. Businesses with turnover above ₹5 crore must use 6-digit HSN codes; above ₹1.5 crore must use 4-digit codes; below ₹1.5 crore can optionally omit HSN codes. Using the wrong HSN code can result in applying the wrong GST rate, leading to compliance issues and potential penalties during GST audits.