India's Item-Wise GST Rate Slabs for 2026

GST Rates List India 2026: Item-Wise 0%, 5%, 18% and 40% Slabs

Since GST 2.0 took effect on 22 September 2025, India runs on four main rate slabs: 0%, 5%, 18% and 40%. The old 12% and 28% slabs are gone. This is the item-wise reference list most people actually search for: which everyday goods and services sit in each slab after the reform, category by category.

If you want the high-level story of why the slabs were collapsed, read our GST 2.0 rate structure guide. This article is the lookup table you keep open while updating your item master.

The Four Slabs at a Glance

Tax Rate Chart

GST 2.0 Slab Structure (Effective 22 September 2025)

Four main rates replaced the old five-tier 0/5/12/18/28% system

Nil rate : most unbranded food staples, individual health and life insurance, lifesaving medicines, educational stationery

Expanded under GST 2.0

0%

Merit rate : essentials and mass consumption, packaged food, general medicines, medical devices

Absorbed roughly 99% of old 12% items

5%

Standard rate : most goods and services, electronics, small cars, professional and IT services

Absorbed roughly 90% of old 28% items

18%

Luxury and sin rate : aerated drinks, luxury cars, high-cc bikes, tobacco, pan masala, gaming

Narrow, all-inclusive rate

40%

Source: GST 2.0 reform effective 22 September 2025; CBIC rate schedules

Two ideas explain almost every movement:

1. The 12% slab was eliminated. Roughly 99% of items that sat at 12% moved down to 5% (dairy, personal care, packaged snacks, many medical devices). The remainder moved up to 18% (for example, textiles priced above Rs. 2,500 and a few select services).
2. The 28% slab was restructured. Around 90% of its items moved down to 18% (air conditioners, televisions, small cars). Only luxury and sin goods were pushed up to the new 40% slab.

The net effect is that most mainstream goods became cheaper, while a narrow band of luxury and sin categories became more expensive.

0% (Nil-Rated): What You Pay No GST On

The nil slab was widened under GST 2.0. The headline change is that individual health and life insurance premiums, previously taxed at 18%, are now exempt.

5% (Merit Rate): Essentials and Mass Consumption

The 5% slab is where most of the eliminated 12% items landed, alongside the existing essentials. Treat this as the "daily necessities" band.

Because footwear, apparel and some food categories split by price or packaging, treat the 5% classification as the starting point and confirm the threshold that applies to your specific item.

18% (Standard Rate): Most Goods and Services

The 18% slab is now the default rate for the economy. If a good or service is neither an essential nor a luxury/sin item, it almost certainly sits here. This band absorbed roughly 90% of the old 28% slab.

40% (Luxury and Sin Rate): The Narrow Top Band

The 40% slab is deliberately small. It captures items the GST Council wanted to tax more heavily, whether for revenue or public-health reasons. It is an all-inclusive rate for these categories.

If your business is not in one of these categories, you will not see 40% on an invoice. For everyone else in these sectors, note that this is the total GST rate for the item, not a base rate to which something else is added.

Services After GST 2.0

Services largely follow the same logic as goods. The standard position is 18%, with specific categories mapped down to 5% or nil, and a narrow set of admissions (casino, betting, online gaming) at 40%. IT, software and professional services remain in the standard 18% band. Because services are classified by SAC code rather than HSN, the classification discipline is the same: identify the correct SAC, then read the rate off the current schedule.

How to Use This List Correctly

The single most common invoicing error after a rate reform is applying a category-level rate to a product that splits within the category. A few practical rules:

1. Start from HSN/SAC, not from the product name. The rate attaches to the code, not the marketing description.
2. Watch price and packaging thresholds. Footwear, apparel and certain food items change slab based on price or whether they are branded and pre-packaged.
3. Update the item master, not just the invoice template. A stale rate in your accounting software will keep re-appearing on new invoices and create GSTR-2B mismatches for your buyers.
4. If you are registering a new business, map your product catalogue to slabs before your first invoice. Our GST registration process guide walks through the steps.

Where to Go Next

If your catalogue spans several of these bands, the practical work is mapping each SKU to its HSN or SAC code, confirming the slab, and locking it into your accounting software before the next filing cycle. Get that right once and your monthly GST return filing becomes a reconciliation exercise rather than a classification scramble.

This guide reflects the GST 2.0 reform effective 22 September 2025, which replaced the five-tier 0/5/12/18/28% structure with the 0/5/18/40% slabs described above. Slab movements and category mappings are drawn from GST Council decisions and CBIC rate schedules. Because rates attach to specific HSN and SAC codes and several categories split by price, packaging or branding, confirm the exact rate for any individual item against the current CBIC notification before issuing invoices or amending returns.

Frequently Asked Questions

What happened to items that were taxed at 12% and 28% before September 2025?

Both slabs were removed from 22 September 2025. Most items at 12%, such as many packaged foods, dairy products and medical devices, moved down to 5%, while a few moved up to 18%. Most items at 28%, such as air conditioners, televisions and small cars, moved down to 18%, and only luxury and sin goods moved to the new 40% slab.

Is 40% GST charged on top of compensation cess for luxury cars and aerated drinks?

For goods moved into the 40% slab, such as aerated drinks and large luxury cars, the 40% is intended as the complete GST rate, replacing the old combination of 28% plus compensation cess. It is not a base rate with cess added. Check the current notification for your exact item, since a few categories followed a separate transition timeline.

How do I find the correct GST rate for a product in my catalogue?

Start from the product's HSN code, not its trade name, and read the rate from the current CBIC rate schedule. Watch for items whose rate depends on price or packaging, such as garments above or below Rs 2,500 per piece. Then update the rate in your billing software's item master so every new invoice picks it up.

What GST rate applies to most services after GST 2.0?

Most services, including IT, software, consulting, legal and accounting services, continue at 18%. Specific categories have their own entries, such as 5% without input tax credit for standalone restaurants and hotel rooms up to Rs 7,500 per night, while casinos, betting and online money gaming are taxed at 40%. Services are looked up by SAC code.

What should I do if I still invoiced at the old 12% or 28% rate after 22 September 2025?

Correct it quickly. If you under-charged, issue a debit note or revised invoice and pay the shortfall with interest. If you over-charged, issue a credit note to the customer within the time allowed, or the excess tax cannot be adjusted. Report the corrections in GSTR-1 so your buyers' GSTR-2B credit matches.