The Goods and Services Tax (GST) in India is a comprehensive indirect tax levied on the manufacture, sale, and consumption of goods and services across the country. The GST Council, the governing body responsible for all GST-related decisions, regularly reviews and updates GST rate slabs. These rates vary depending on the nature of the goods or services, with luxury items typically attracting higher GST rates, while essential commodities are taxed at lower rates.
India’s GST rates are divided into four main slabs: 5%, 12%, 18%, and 28%. These rates are applied based on the classification of goods and services, with luxury and non-essential items typically attracting the highest rates. Over time, the GST Council has revised these rates multiple times to ensure they remain relevant to market conditions and economic needs.
Since the introduction of GST, the council has periodically revised rates. The latest revision occurred during the 41st GST Council Meeting on August 27, 2020. This meeting did not result in major changes, reflecting a period of stability in GST rates. According to the Union Budget 2024-25, no further changes have been made to the GST rate structure.
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The GST structure in India is designed to cater to different categories of taxpayers. The primary GST slabs include:
Taxpayers under the composition scheme are subject to lower GST rates, such as 1.5%, 5%, or 6% on their turnover. This scheme simplifies GST compliance for small taxpayers by allowing them to pay a fixed percentage of their turnover as tax.
Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) are also part of the GST system, with rates of 2% and 1%, respectively. These mechanisms ensure tax collection at the source of income and facilitate better tracking of tax liabilities.
In addition to the standard GST rates, a cess is imposed on the sale of certain items such as cigarettes, tobacco, aerated water, gasoline, and motor vehicles. The cess rates vary significantly, ranging from 1% to 204%, depending on the item.
The following are some of the changes that were made-
| Category | Old GST Rates | New GST Rates |
| Railways Goods and Parts under Chapter 86 | 12% | 18% |
| Pens | 12% | 18% |
| Metal Concentrates and Ores | 5% | 18% |
| Certain Renewable Energy Devices | 5% | 12% |
| Recorded media reproduction and print | 12% | 18% |
| Broadcasting, sound recordings, and licensing | 12% | 18% |
| Printed material | 12% | 18% |
| Packing containers and boxes | 12% | 18% |
| Scrap and polyurethanes | 5% | 18% |
| Items | Old Rate | New Rate |
| A uniform rate for all types of milk cans | – | 12% |
| A uniform IGST rate applies to imports of aircraft tool kits | – | 5% |
| Carton boxes and cases | 18% | 12% |
| All types of solar cookers | 5% | 12% |
| A uniform rate for all types of sprinklers | – | 12% |
| Indian Railways – Platform tickets | – | Exempt |
| Indian Railways – Facility of retiring rooms/waiting rooms | – | Exempt |
| Indian Railways – Cloakroom services | – | Exempt |
| Indian Railways – Battery Operated car services | – | Exempt |
| Hostel accommodation service under certain conditions | – | Exempt |
| Category | Old GST Rates | New GST Rate |
| If vehicles are equipped with retrofitting kits for disabled people, | Applicability | 5% |
| Keytruda for cancer | 12% | 5% |
| IGST is levied on goods sold at the Indo-Bangladesh border | Applicability | NIL |
The primary GST slabs for regular taxpayers are currently 0% (nil-rated), 5%, 12%, 18%, and 28%. There are a few GST rates that are less commonly used, such as 3% and 0.25%.
Furthermore, the taxable composition persons are required to pay General Service Tax at lower or nominal rates such as 1.5%, 5%, or 6% on their turnover. TDS and TCS are also concepts under GST, with rates of 2% and 1%, respectively.
These are the total IGST rates for interstate supplies or the sum of CGST and SGST for intrastate supplies. To calculate the GST amounts on a tax invoice, multiply the GST rates by the assessable value of the supply.
Furthermore, in addition to the above GST rates, the GST law imposes a cess on the sale of certain items such as cigarettes, tobacco, aerated water, gasoline, and motor vehicles, with rates ranging from 1% to 204%.
| Products | Tax Rates |
| Milk | 0% |
| Eggs | 0% |
| Curd | 0% |
| Lassi | 0% |
| Kajal | 0% |
| Educations Services | 0% |
| Health Services | 0% |
| Children’s Drawing & Coloring Books | 0% |
| Unpacked Foodgrains | 0% |
| Unpacked Paneer | 0% |
| Gur | 0% |
| Unbranded Natural Honey | 0% |
| Fresh Vegetables | 0% |
| Salt | 0% |
| Unbranded Atta | 0% |
| Unbranded Maida | 0% |
| Besan | 0% |
| Prasad | 0% |
| Palmyra Jaggery | 0% |
| Phool Bhari Jhadoo | 0% |
| Products | Tax Rates |
| Sugar | 5% |
| Tea | 5% |
| Packed Paneer | 5% |
| Coal | 5% |
| Edible Oils | 5% |
| Raisin | 5% |
| Domestic LPG | 5% |
| Roasted Coffee Beans | 5% |
| PDS Kerosene | 5% |
| Skimmed Milk Powder | 5% |
| Cashew Nuts | 5% |
| Footwear (< Rs.500) | 5% |
| Milk Food for Babies | 5% |
| Apparels (< Rs.1000) | 5% |
| Fabric | 5% |
| Coir Mats, Matting & Floor Covering | 5% |
| Spices | 5% |
| Agarbatti | 5% |
| Coal | 5% |
| Mishti/Mithai (Indian Sweets) | 5% |
| Life-saving drugs | 5% |
| Coffee (except instant) | 5% |
| Products | Tax Rates |
| Butter | 12% |
| Ghee | 12% |
| Computers | 12% |
| Processed food | 12% |
| Almonds | 12% |
| Mobiles | 12% |
| Fruit Juice | 12% |
| Preparations of Vegetables, Nuts Fruits, or other parts | 12% |
| Packed Coconut Water | 12% |
| Umbrella | 12% |
| Products | Tax Rates |
| Hair Oil | 18% |
| Capital goods | 18% |
| Toothpaste | 18% |
| Industrial Intermediaries | 18% |
| Soap | 18% |
| Ice-cream | 18% |
| Pasta | 18% |
| Toiletries | 18% |
| Corn Flakes | 18% |
| Soups | 18% |
| Computers | 18% |
| Printers | 18% |
| Products | Tax Rates |
| Small cars (+1% or 3% cess) | 28% |
| High-end motorcycles (+15% cess) | 28% |
| Consumer durables such as AC and fridge | 28% |
| Beedis are NOT included here | 28% |
| Luxury & sin items like BMWs, cigarettes | 28% |
| and aerated drinks (+15% cess) | 28% |
All goods and services under GST are classified using either the HSN (Harmonized System of Nomenclature) code or the SAC (Services Accounting Code) system.
The HSN code is an internationally accepted commodity description and coding system developed by the World Customs Organization (WCO). It is used by over 200 countries and covers more than 98% of global trade. In India, the HSN code is used for GST classification and levy, ensuring a standardized system for categorizing goods.
The HSN codes are categorized into sections and chapters, with each chapter containing a six-digit code representing a specific category of goods. The current version in use is the HSN Code 2017 Edition.
The SAC code, developed by the Service Tax Department of India, is used to classify services under GST. The GST rates for services are set in five slabs: 0%, 5%, 12%, 18%, and 28%. If a service does not fall under a specific GST exemption or rate, the default rate of 18% is applied.
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The GST rate structure in India is designed to cater to a diverse range of goods and services, with rates varying based on the nature and necessity of the product or service. The GST Council continues to review and adjust these rates to meet the evolving needs of the economy. By understanding the various GST rates, businesses and consumers can better navigate the tax landscape and ensure compliance.
The primary GST rate slabs in India are 5%, 12%, 18%, and 28%. There are also special rates like 0%, 3%, and 0.25% for specific items.
GST rates are revised periodically by the GST Council. The most recent revision occurred during the 41st GST Council Meeting on August 27, 2020.
The standard GST rate for services is 18%. However, certain services may fall under other slabs like 5%, 12%, or 28%.
A GST cess is an additional tax levied on certain items like tobacco, aerated water, and luxury cars. The cess rate varies depending on the item and can range from 1% to 204%.
The HSN code is used to classify goods under the GST system, ensuring a standardized method for tax levy and compliance across international trade.
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