GST Tax Rate List India 2026 — Overview of Slabs (Updated for GST 2.0)
Understanding GST Slabs in India
India's GST council adopted a multi-tiered tax structure to balance revenue generation with inflation control and social equity. Essential goods are taxed at lower rates or exempted entirely, while luxury items and "demerit" goods attract the highest rates. Following the September 2025 GST 2.0 rationalization reforms, a dedicated 40% tax slab was introduced for sin and ultra-luxury goods to streamline earlier combinations of 28% GST plus heavy compensation cesses. When generating a tax invoice, you must identify the correct GST percentage based on the HSN (goods) or SAC (services) code of your offering.
The 6 Primary GST Categories (GST 2.0)
1. Exempt / Nil Rate (0%)
This category includes essential daily consumption items and basic services to protect lower-income groups.
- Goods: Unpacked food grains, fresh fruits and vegetables, unbranded milk, eggs, salt, bread, books, newspapers, jute.
- Services: Specified educational services, basic healthcare services, public libraries, certain agricultural services.
2. 5% Slab
Covers items of mass consumption that require processing.
- Goods: Packaged food items (branded), tea, coffee (except instant), edible oils, sugar, spices, life-saving drugs, footwear (below ₹1,000), apparel (below ₹1,000).
- Services: Transport of goods by rail/vessel, standalone restaurants, economy class air travel, tour operator services.
3. 12% Slab
Standard rate for widely used goods and services.
- Goods: Butter, cheese, ghee, fruit juices, packaged drinking water, apparel (above ₹1,000), umbrellas, cell phones, sewing machines.
- Services: Business class air travel, state-run lotteries, non-AC restaurants.
4. 18% Slab (Standard Rate)
This is the default rate for most manufactured goods and the vast majority of services.
- Goods: Hair oil, soap, toothpaste, capital goods, industrial intermediaries, footwear (above ₹1,000), computers, monitors.
- Services: IT services, freelance consulting, telecom services, financial services, branded garments, AC restaurants in five-star hotels, outdoor catering.
5. 28% Slab
Applies to premium consumer durables and commercial motor vehicles.
- Goods: Commercial trucks, select automotive parts, air conditioners, refrigerators, cement.
- Services: Five-star hotel stays (above certain tariffs), racing club services, entertainment events.
6. 40% Slab (GST 2.0 Luxury & Demerit Goods)
Introduced under the September 2025 GST 2.0 rationalization reforms, this rate unifies sin taxes and luxury goods under a single high-tier slab.
- Goods: High-end luxury automobiles, aerated sugary/caffeinated drinks, tobacco and pan masala products, private yachts, and helicopters.
- Services: High-stakes gaming admissions, casino access, and specified demerit entertainment activities.
Note: The 40% slab consolidates previously separated 28% base tax and compensation cess levies into a transparent, unified rate under the GST 2.0 framework.
Special GST Rates
Besides the primary slabs, there are a few special rates for specific sectors:
- 3% Rate: Gold, silver, platinum, and other precious metals, imitation jewellery.
- 0.25% Rate: Rough industrial diamonds, unworked precious and semi-precious stones.
- Composition Scheme Rates: 1% for traders and manufacturers, 5% for restaurants (without ITC), and 6% for service providers (up to ₹50 lakh turnover).
How to Apply the Correct Rate on Your Invoice
When invoicing a client, you must clearly state the GST rate and calculate the amounts accurately. If it is an intra-state supply (supplier and buyer in the same state), the GST rate is split equally into CGST (Central GST) and SGST (State GST). If it is an inter-state supply, the full rate is applied as IGST (Integrated GST).
For example, for a ₹10,000 IT consulting service (18% GST):
- Intra-state: CGST ₹900 (9%) + SGST ₹900 (9%) = ₹1,800
- Inter-state: IGST ₹1,800 (18%)
Frequently Asked Questions
What are the current GST slabs in India?
India follows a tiered GST structure updated under the GST 2.0 rationalization reforms with primary tax slabs: 5%, 12%, 18%, 28%, and the 40% luxury/demerit slab. There is also a 0% (exempt) category for essential items, and special rates like 3% for gold and jewellery and 0.25% for rough precious stones.
What items fall under the new 40% GST slab?
Introduced under the September 2025 GST 2.0 rationalization reforms, the 40% slab applies to ultra-luxury goods and demerit/sin items. This includes high-end luxury automobiles, aerated caffeinated drinks, tobacco products, pan masala, private aircraft, and yachts, consolidating earlier 28% GST plus heavy compensation cess structures.
Which GST rate applies to most services?
The standard GST rate for most services, including IT services, consulting, professional fees, and freelance work, is 18%. However, some services like certain transport and restaurant services may fall under the 5% slab.
What items fall under the 28% GST slab?
The 28% slab generally applies to premium consumer durables, air conditioners, refrigerators, and commercial motor vehicles.
How do I find the exact GST rate for my product?
To find the exact GST rate, you need to identify the HSN (Harmonized System of Nomenclature) code for your product or the SAC (Services Accounting Code) for your service, and then check the official CBIC rate notifications or use BillBanao's HSN lookup tool.