GST Rates in India 2026: Complete GST Rate List, Tax Slabs & Latest Updates

Introduction

"PP Singh sahab, humara item kis rate mein aayega?" I hear some version of this question almost daily at my Jaipur office now. And honestly, I don't blame anyone for asking. GST rates have shifted more in the past twelve months than in the previous seven years combined.

So if you're still going by a rate chart you printed in 2023 or 2024, bin it. The GST Council tore down and rebuilt the entire rate structure in September 2025, and a lot of businesses I meet are still billing on old habits rather than the new rules.

I'm not going to hand you a textbook here. This is the rate list I actually use with clients, where things went wrong for people, and where I keep telling traders and MSMEs to double-check before they raise an invoice.

What is GST?

GST replaced a whole mess of central and state taxes, VAT, excise, service tax, a dozen smaller cesses, and folded them into one indirect tax. It came into force on 1 July 2017, charged at every stage of the supply chain, with credit passed on for tax already paid on inputs.

For a Sanganer textile trader or a Bikaner spice exporter, that's one tax instead of five to worry about. But it also means your rate depends entirely on classification, not on what you call the product on your bill. That's exactly where most billing mistakes begin, in my experience.

The numbers show how big this tax has become for the government, too. Gross GST collections hit Rs 1,94,812 crore in June 2026 alone, a 13.9% jump over last year, and the cumulative figure for the financial year through June 2026 crossed Rs 6,31,699 crore. Every rupee of that is coming out of returns filed by businesses, no different from yours.

GST Tax Slabs in India

Forget the old 5-12-18-28 structure most of us learned by heart. It's gone. The 56th GST Council meeting on 3 September 2025 approved what everyone's now calling GST 2.0, and the new rates kicked in from 22 September 2025 under Notification No. 9/2025-Central Tax (Rate).

0% (Nil-rated): Fresh grains, milk, paneer, roti, paratha, books, and, this one caught a lot of people off guard, individual life and health insurance too. Education and healthcare stay mostly exempt, as before.

0.25%: Still just for rough diamonds and semi-precious stones. This tiny slab didn't get touched at all.

3%: Gold, silver, precious metals, unchanged. Bill is making charges separately, and those get taxed at 5%.

5% (Merit Rate): This one absorbed most of the old 12% items and a chunk of 18% items too. Packaged food, footwear, and garments under Rs 2,500, small cars, two-wheelers up to 350cc, budget hotel rooms under Rs 7,500 a night, all here now.

12%: Gone. Whatever used to sit here has been reshuffled, mostly down to 5%; a smaller portion has been pushed up to 18%.

18% (Standard Rate): This is the workhorse now. Most services, cement, mobile phones, consumer electronics, and a big chunk of what used to be 28% items live here.

28%: Also scrapped. About 90% of what used to be taxed at 28%, cement, ACs, TVs, fridges, moved down to 18%. The rest went up into the new 40% bracket.

Which brings us to the new 40% de-merit rate. It replaced the old 28% plus compensation cess combo for a short, specific list of sin and luxury goods.

GST Rate Chart (Table)

GST Rates for Popular Products

Food Items: Biscuits, namkeen, sauces, instant noodles, chocolates, most of the packaged food dropped from 12% or 18% straight to 5%. UHT milk and paneer are nil now, and Indian breads carry zero GST, full stop.

Medicines: Regular medicines sit at 5%, down from 12%. Thirty-three lifesaving drugs for cancer and rare diseases went to nil, and three more that were already at 5% dropped to nil, too.

Mobile Phones: Still 18%, HSN 8517. One of the few things the reform left completely alone.

Laptops: Also 18%, same as before GST 2.0. No change here either.

Electronics: This is where households actually felt the difference. TVs of every size, ACs, fridges, washing machines, dishwashers, all fell from 28% to 18%.

Clothes: Readymade garments priced under Rs 2,500 per piece attract a 5% tax. The old threshold was Rs 1,000, so this got raised quite a bit. Cross Rs 2,500 and you're at 18%.

Gold & Jewellery: Gold and silver held at 3% on metal value. Bill making charges as a separate line, and that portion attracts 5%.

Cement: Down from 28% to 18%, and this one matters more than it sounds. Cement alone makes up roughly 15-20% of what goes into building a house.

Automobiles: Small cars, petrol up to 1200cc, diesel up to 1500cc within the length limit, moved from 28% to 18%. Bigger and luxury vehicles, plus SUVs over the size and engine thresholds, now sit at a flat 40%, no extra cess stacked on top.

FMCG Products: Soap, shampoo, toothpaste, hair oil, toothbrushes, all dropped to 5% from their earlier 12% or 18% rates. The government called this direct relief for households, and for once, the billing reflects it.

GST Rates for Services

Restaurants: Standalone places, AC or non-AC, charge 5% without ITC. Restaurants sitting inside hotels where any room charges over Rs 7,500 a night, charge 18% with ITC. Clients ask me about this one constantly, so remember it's about the hotel's room tariff, not the food.

Hotels: Rooms up to Rs 7,500 a night attract 5%, down from 12%. Go above that, and it's 18% with ITC available.

Transportation: Cabs, autos, buses stay at 5%. Trucks, buses, and ambulances came down from 28% to 18%, and third-party insurance on goods carriages dropped from 12% to 5% with ITC.

Banking: Loan processing, account services, standard financial products, still 18%. Nothing moved here.

Insurance: Here's the one I'd call the real headline of GST 2.0. Individual life insurance, term, ULIP, endowment, all of it, plus individual health insurance, including family floater and senior citizen plans, are now fully exempt. No GST at all.

Education: Formal education from recognised institutions stays outside GST, same as before.

Healthcare: Core healthcare stays exempt. Medical devices and equipment for diagnosis, surgery, or veterinary use dropped from 18% to 5%.

Online Services: SaaS and digital subscriptions under the OIDAR category stay at 18%. Online money gaming, though, now gets hit at 40% on the entire bet value, not just the platform's cut.

Professional Services: IT consulting, legal, accounting, marketing, design, all still 18%. This slab didn't budge for anyone in professional services.

How to Check GST Rate Using HSN Code

Your product's HSN (Harmonised System of Nomenclature) code decides the rate, and services follow the SAC code. Not the product name you've written on the bill for the last ten years.

Head to the CBIC portal at cbic-gst.gov.in. It carries the full Notification No. 9/2025-Central Tax (Rate) with all seven rate schedules. Search by chapter or heading, and you'll land on the exact classification.

The GST portal's rate finder is fine for quick checks while billing, but I still tell every client to cross-check against the actual notification before the invoice goes out, especially for anything that jumped between slabs during the reform.

Latest GST Rate Updates in 2026

September 2025 remains the big one, but 2026 hasn't been quiet either. Notification No. 01/2026-Central Tax (Rate), dated 30 April 2026, fixed a few HSN classifications to line up with the Finance Act 2026 changes, effective from 1 May.

Pan masala, gutkha, cigarettes, and chewing tobacco are still running on the old rates plus compensation cess. The Council plans to move these to the flat 40% rate, but only once the Centre finishes paying off loan and interest obligations tied to the compensation cess account. Nobody has a firm date for that yet, so keep an eye out.

Compensation cess is gone from nearly everything else already. Tobacco is the last holdout until that condition is met.

Common GST Rate Mistakes Businesses Should Avoid

The one I see most, even now, months after the reform, is billing at the old 12% or 28% rate purely out of habit. Go into your billing software, open the master rate list, and check it line by line against current HSN classifications.

People also confuse the product name with the HSN rate, and that trips up more traders than you'd expect. "Namkeen" sounds simple enough, but the real rate depends on the specific HSN sub-heading and how it's packaged.

The Rs 2,500 threshold on garments and footwear catches people out too. I had a client billing a Rs 2,800 kurta at 5% instead of 18%, and that gap sits there quietly until a GST officer runs a reconciliation and finds it.

And restaurants keep tripping over the "specified premises" rule. A standalone restaurant can't just declare itself one to grab the 18% ITC rate. The Council closed that door on purpose.

Tips to Stay GST Compliant

Check your HSN master list every quarter, not just whenever a notification happens to land in your inbox. Rate changes usually show up in press releases well before the formal notification catches up.

Reconcile GSTR-1 against GSTR-3B every month, not once a year. Small rate mismatches pile up fast if you're filing a lot of invoices.

Keep a folder, physical or digital, of CBIC notifications relevant to your business. When a GST officer questions a rate, pulling up the exact notification number on the spot saves you weeks of back-and-forth.

And work with someone who actually tracks Council meetings, not just files returns. The rate structure has moved twice in a year now. It could move again.

FAQs

Q1. What are the current GST rates in India in 2026?
Ans. The primary slabs are 0%, 5%, and 18%, with a special 40% rate for sin and luxury goods. Niche rates of 0.25% and 3% survive for diamonds and precious metals.

Q2. When did the new GST rates come into effect?
Ans. The GST 2.0 structure took effect from 22 September 2025 for most goods and services, following Notification No. 9/2025-Central Tax (Rate).

Q3. Are the 12% and 28% GST slabs still active?
Ans. No. Both were abolished as part of GST 2.0. Items from these slabs moved to 5%, 18%, or the new 40% rate, depending on classification.

Q4. What is the GST rate on mobile phones in 2026?
Ans. 18%, unchanged from before the reform.

Q5. Is GST charged on life and health insurance now?
Ans. No. Individual life and health insurance policies, including family floater and senior citizen plans, are exempt from GST since September 2025.

Q6. What GST rate applies to restaurants?
Ans. 5% without input tax credit for standalone restaurants, both AC and non-AC. Restaurants in hotels with room tariffs above Rs 7,500 a night charge 18% with ITC.

Q7. How do I find the correct GST rate for my product?
Ans. Identify your product's HSN code first, then check it against Notification No. 9/2025-Central Tax (Rate) on the CBIC portal, since the rate depends on classification, not the product's common name.

Q8. What is the GST rate on gold and jewellery?
Ans. 3% on the value of gold or silver, plus 5% on making charges if billed separately.

Q9. Why was a 40% GST slab introduced?
Ans. It replaced the earlier 28% plus compensation cess combination for sin and luxury goods, consolidating tobacco, pan masala, aerated drinks, and luxury vehicles into a single de-merit rate.

Q10. Does compensation cess still apply?
Ans. Only on tobacco and pan masala products, and only until the Centre clears its compensation cess loan obligations. It has been scrapped for virtually everything else.

Conclusion

GST rates in India just went through their biggest shake-up since 2017, and 2026 is really the year businesses have to catch up, not just their software, but their whole billing habit. Whether you're selling cement out of Jodhpur or running a boutique in Sanganer, what you charge today depends on the current HSN classification under GST 2.0, not on whatever you charged last year.

Get it wrong, and it shows up eventually, as a mismatch sitting in your returns waiting to be found. Get it right, and billing stops being something you have to think about every month.

Call to Action

Still not sure which slab your product or service lands in after the reform? GST Filling handles GST Registration, GST Return Filing, GST Notice Reply, GST Amendment, GST Cancellation, and full GST Consultation and Compliance support, for businesses across Rajasthan and beyond. Reach out to our Jaipur team and get your rates, returns, and compliance sorted before the next notification catches you off guard.

Author Bio
Sanju Meena is an SEO Executive at LegalDev, where he manages SEO and content strategy for GST Filling. He researches the latest GST notifications, tax reforms, and compliance updates to create accurate, informative, and SEO-optimized content for businesses across India.