The Goods and Services Tax (GST) is one of the biggest tax reforms in India, bringing multiple indirect taxes under a single system. The GST Council, headed by the Union Finance Minister, decides and revises GST rates from time to time depending on economic needs, inflation, and industry requirements.
GST is designed to be lower on essential goods and services and higher on luxury or sin items. Currently, GST in India is divided into five main slabs – 0%, 5%, 12%, 18%, and 28%, with some additional special rates (like 0.25% and 3%) and cess on selected products.
Latest GST Updates (2025)
- As per the Union Budget 2024-25, no major structural change was introduced in GST rates.
- However, the GST Council meeting held on 22 June 2024 brought in a few revisions for specific goods and services.
Major GST Rate Changes
| Category / Item | Old GST Rate | New GST Rate |
|---|---|---|
| Railway goods & parts (Chapter 86) | 12% | 18% |
| Pens | 12% | 18% |
| Metal concentrates & ores | 5% | 18% |
| Renewable energy devices | 5% | 12% |
| Packing boxes & containers | 12% | 18% |
| Recorded media & printing | 12% | 18% |
| Scrap & polyurethanes | 5% | 18% |
| Broadcasting & licensing services | 12% | 18% |
Reductions in GST Rates
| Category / Item | Old GST Rate | New GST Rate |
|---|---|---|
| Vehicles retrofitted for disabled persons | Standard rate | 5% |
| Cancer drug Keytruda | 12% | 5% |
| IGST on goods sold at Indo-Bangladesh border | Applicable | NIL |
Also see: Hotel room gst rate
GST Slabs in 2025
0% GST (Essential Items)
Items of basic necessity and public welfare services are exempt:
- Milk, eggs, curd, lassi, paneer (unbranded)
- Unpacked foodgrains, atta, maida, besan, gur, natural honey
- Fresh vegetables, salt, prasad, jaggery, broomsticks
- Education services, healthcare services
- Children’s drawing and coloring books
5% GST (Common Household Items)
Applied to daily consumption goods:
- Sugar, tea, coffee (except instant), edible oils, spices
- Domestic LPG, PDS kerosene
- Packed paneer, skimmed milk powder
- Apparels (< ₹1000), footwear (< ₹500)
- Mishti/mithai (Indian sweets), agarbatti
- Coal, coir mats, baby milk food, cashew nuts, raisins
12% GST (Mid-Range Goods)
- Butter, ghee, processed food
- Fruit juices, coconut water (packed)
- Mobiles, computers
- Almonds, umbrellas
- Vegetable/nut/fruit preparations
18% GST (Standard Goods & Services)
- Hair oil, toothpaste, soaps, toiletries
- Ice cream, pasta, soups, cornflakes
- Printers, industrial intermediaries, capital goods
- Toiletries and packaged products
28% GST + Cess (Luxury & Sin Goods)
- Luxury cars, high-end motorcycles
- Aerated drinks, tobacco, cigarettes
- Air conditioners, refrigerators, consumer durables
- Cess varies from 1% to 204% depending on the product
HSN & SAC Code System
All goods and services are classified for GST under HSN (Harmonized System of Nomenclature) and SAC (Services Accounting Code).
- HSN Codes: Used for goods classification (internationally standardized).
- SAC Codes: Used for service classification.
GST rates are applied as per these codes across slabs – 0%, 5%, 12%, 18%, and 28%. If no specific rate is mentioned for a service, the default rate of 18% applies.
Final Notes
The GST framework continues to evolve as the government monitors inflation, industry feedback, and consumer impact. Essential goods remain tax-free or under the 5% slab, while luxury and non-essential products attract higher GST plus cess.
To quickly check how GST applies to your purchase or invoice, use our GST Calculator for accurate results.