GST · 26 June 2026
What Are the GST Rate Slabs in India After the GST 2.0 Reform?
After the GST 2.0 reform recommended by the 56th GST Council and effective 22 September 2025, India taxes goods and services at three main GST rates, 5%, 18%, and a special 40% on sin and luxury goods, alongside a 0% nil rate. The earlier 12% and 28% slabs were largely merged into 5% and 18%. The rate that applies to a supply depends on its HSN or SAC classification under the rate notifications.
By Mrs. Swapna Patel
Last reviewed
26 June 2026
In this section
Answers
- What Are the GST Rate Slabs in India After the GST 2.0 Reform?
- What Is GSTR-1, the GST Return of Outward Supplies?
- What Is GSTR-3B, the Monthly GST Summary Return?
- What Is the Time of Supply Under GST, and When Does Tax Become Due?
- Advance Receipt Under GST: When Do You Issue a Receipt Voucher?
- Credit Note vs Debit Note Under GST: When Do You Issue Each?
- What Is GSTR-2B, and Why Does It Now Decide Your Input Tax Credit?
- What Is the Value of Supply Under Section 15 of the CGST Act?
- Exempt vs Nil-Rated vs Zero-Rated Supply: What Is the Difference?
- Composite vs Mixed Supply Under Section 8: Which GST Rate Applies?
GST in India still has four main slabs: 5%, 12%, 18%, and 28%.
From 22 September 2025, the 56th GST Council reform (GST 2.0) cut the structure to three taxable rates, 5%, 18%, and a special 40% on sin and luxury goods, with 0% for nil-rated items. The 12% and 28% slabs were largely removed.
What are the current GST rate slabs?
Short answer
There are three taxable slabs, 5%, 18%, and a special 40% on sin and luxury goods, plus a 0% nil rate. This follows the 56th GST Council GST 2.0 reform effective 22 September 2025.
| Slab | Typically covers | Notes |
|---|---|---|
| 0% (nil-rated) | Essential foods, many lifesaving drugs, education items | No GST charged; the buyer cannot claim ITC on these. |
| 5% | Daily essentials, agricultural goods, much healthcare equipment | Many items earlier at 12% moved here. |
| 18% | Most goods and services, appliances, small vehicles | The standard rate; much of the old 28% slab moved here. |
| 40% | Sin and luxury goods: pan masala, aerated drinks, luxury vehicles | A special high rate, not a general slab. |
Structure effective 22 September 2025 under GST 2.0. Source: 56th GST Council and CBIC rate notifications. Item-level classification is notification-specific and changes over time, so confirm a product’s exact rate against the current CBIC notification before billing.
What changed from the old 12% and 28% slabs?
Short answer
GST 2.0 collapsed four taxable slabs into two general rates plus a special rate. Most items that were at 12% moved to 5%, and most at 28% moved to 18%; a narrow set of sin and luxury goods moved to 40%.
- The old structure (5%, 12%, 18%, 28%) ran from 2017 until 21 September 2025.
- Why it matters: an invoice dated on or after 22 September 2025 must use the new rate. Billing an old 12% or 28% rate now produces a wrong tax amount and a reconciliation mismatch.
- The compensation cess that once sat on top of 28% goods has been folded into the new structure for most items; check the notification for any product still carrying cess.
- Nil-rated (0%) supplies were not abolished; the 0% category continues for essentials.
Which GST slab applies to what I sell?
Short answer
The slab is fixed by your supply’s HSN code (goods) or SAC code (services) in the rate notification, not by choice. You read the rate off the notification for that code.
- HSN (Harmonised System of Nomenclature) classifies goods; SAC (Services Accounting Code) classifies services. The notified rate attaches to the code.
- Using the wrong HSN or SAC can apply the wrong slab, which blocks the buyer’s ITC and invites a notice. See what an HSN or SAC code is and why the wrong one blocks ITC.
- A bundle of items can sit across slabs. How it is taxed then follows the composite vs mixed supply rules under Section 8.
- Rates are year-variable. The GST Council revises them periodically, so treat any published list as correct for its date only.
References & related
Primary sources
- 56th GST Council recommendations (GST 2.0 rate rationalisation) — GST CouncilTwo-slab structure (5% and 18%) plus a 40% special rate, effective 22 September 2025.
- CBIC GST rate notifications (effective 22 September 2025) — CBICNotified GST rates for goods and services under the revised slab structure.
- Section 9, Central Goods and Services Tax Act 2017 — CBICCharging section: GST is levied at rates notified by the government.
Last reviewed: 26 June 2026