GST Rates in India: A Complete Slab-Wise Guide

India's Goods and Services Tax uses a multi-tier slab structure, meaning different categories of goods and services are taxed at different rates rather than a single flat rate — and those slabs changed significantly in September 2025, so it's worth knowing the current structure rather than the older one still floating around in outdated articles.

The GST 2.0 reform

On September 22, 2025, a major rate rationalization — commonly referred to as GST 2.0 — took effect, simplifying what had been a four-slab system (5%, 12%, 18%, 28%) into a leaner structure. The 12% and 28% slabs were removed entirely, with most items previously taxed at 12% moved down to 5%, and most items previously taxed at 28% moved down to 18%.

The current slabs

1. 0% (nil-rated) — essential unprocessed food items and a small set of exempted goods and services.
2. 5% — the merit rate, covering essential and mass-consumption goods, packaged food staples, and many everyday services.
3. 18% — the standard rate, now covering most goods and services that don't fall into the merit or de-merit categories, including most consumer electronics, financial services, and telecom.
4. 40% — a special de-merit rate reserved for select luxury and sin goods, such as tobacco products, high-end vehicles, and aerated drinks — replacing the old 28% slab plus cess structure for these categories.

Why the slab matters for your invoice

The GST rate applied to a transaction determines how much tax is added to a base price, or how much is embedded in a price that's already inclusive. Applying an outdated or incorrect rate is one of the most common invoicing mistakes for small businesses and freelancers, and it creates mismatches during GST return filing that can take time to reconcile. If your business or accounting software still has the old 12% or 28% rates configured as defaults, it's worth double-checking they've been updated since the reform.

If you're not sure which rate applies

GST rate classification depends on the specific HSN (Harmonized System of Nomenclature) code for goods, or the SAC (Services Accounting Code) for services — not just a general category guess. For anything beyond routine, well-known items, checking the current notified rate for the specific HSN/SAC code (or asking an accountant) is safer than assuming based on the old slab structure, especially for items that moved between rates during the 2025 transition.

Calculating GST at any rate

Rather than manually multiplying and dividing for each slab, use the GST Calculator to instantly add or remove GST at any percentage and see the exact breakdown — base amount, tax amount, and final price. Once you have the right numbers, the Invoice Generator turns them into a clean, itemized invoice. For the underlying formulas and how inclusive vs exclusive pricing works, see How to Calculate GST in India.