Short answer: GST in India in 2026 has four main rates — 0%, 5%, 18% and 40% — plus two special rates: 3% on gold, silver and jewellery, and 0.25% on rough (unworked) precious and semi-precious stones. The old 12% and 28% slabs no longer exist. This structure, called GST 2.0, has applied since 22 September 2025.
GST rate list 2026: all slabs with examples
| GST rate | What it covers (examples) |
|---|---|
| 0% (nil) | UHT milk, paneer, roti/chapati, 33 life-saving drugs, exercise books, individual life and health insurance |
| 5% | Packaged food, most medicines, soap/shampoo/toothpaste, tractors, apparel and footwear up to ₹2,500 a piece, hotel rooms under ₹7,500 a night (no ITC) |
| 18% | Most goods and services — ACs, TVs, cement, small cars, auto parts, apparel above ₹2,500, restaurants |
| 40% | Luxury and sin goods — pan masala, cigarettes, aerated drinks, large cars and SUVs, motorcycles above 350cc, online money gaming |
| 3% | Gold, silver and jewellery |
| 0.25% | Rough precious and semi-precious stones |
For any taxable rate, CGST and SGST are each half the rate on a sale within your state (18% = 9% + 9%), and the full rate is charged as IGST on a sale to another state. Work out the tax on an amount with the GST Calculator, and check your item's heading with the HSN/SAC Finder.
What GST 2.0 changed
If you last checked GST rates before September 2025, half of what you know is now wrong. The 56th GST Council meeting scrapped the old 12% and 28% slabs entirely — everything that used to sit in them has moved to either 5% or 18%, a handful of daily essentials became tax-free, and a new 40% band now covers only genuine luxury and sin goods. This is called GST 2.0, and it's been live for a year now. Here's exactly what changed, and what it means if you're the one raising the invoice.
This reflects rates and rules as commonly reported, current as of 26 September 2026. GST notifications are dense and occasionally amended after the fact — confirm the exact rate for your specific HSN/SAC code on the GST portal or with a CA before filing, especially for anything near a slab boundary.
From five slabs to four
Effective 22 September 2025, GST moved from a five-tier structure to four:
| Old slabs | New slabs |
|---|---|
| 0%, 5%, 12%, 18%, 28% | 0%, 5%, 18%, 40% |
The 12% slab is gone — items in it moved to either 5% or 18% depending on whether they're essential or discretionary. The 28% slab is also gone, mostly folded into 18%. The new 40% slab is narrow by design: it exists only for luxury goods and "sin" goods (tobacco, pan masala, high-end cars, casinos), not as a general replacement for 28%.
Old vs new GST rates: common items compared
| Item | Old rate | New rate |
|---|---|---|
| Milk, paneer, Indian breads | 5% | 0% |
| Individual life/health insurance | 18% | 0% |
| Apparel/footwear ≤ ₹2,500/piece | 12% | 5% |
| Apparel/footwear above ₹2,500/piece | 12% | 18% |
| Hair oil, soap, toothpaste | 18% | 5% |
| Hotel rooms below ₹7,500/night | 12% (with ITC) | 5% (no ITC) |
| Cement | 28% | 18% |
| ACs, TVs, dishwashers | 28% | 18% |
| Small cars, motorcycles ≤350cc | 28% | 18% |
| Restaurant/F&B service | 18% | 18% (unchanged) |
| Pan masala, cigarettes, gutkha | 28% + cess | 40% + new cess/excise (from 1 Feb 2026) |
| Large/luxury cars, SUVs | 28% + cess | 40% |
What's now tax-free (0%)
A short but meaningful list moved to nil:
- UHT milk, paneer/chena, and Indian breads (roti, chapati, paratha, khakra)
- 33 specified life-saving drugs
- Exercise books, maps, pencils, crayons, and other educational stationery
- All individual life and health insurance premiums — see below, this one has a catch
What moved to 5%
Most daily essentials and packaged goods landed here, including:
- Packaged food items and most other drugs/medicines not on the nil list
- Personal care — hair oil, shampoo, toothpaste, soap
- Agricultural equipment (tractors and similar)
- Medical and diagnostic devices — thermometers, diagnostic kits
- Apparel and footwear priced ₹2,500 or less per piece — this concessional threshold was raised from ₹1,000, so a lot more clothing now qualifies for 5% instead of 18%
- Hotel rooms tariffed below ₹7,500/night (see the catch under "Hotels" below)
- Spa, salon, and wellness services (down from 12%, but see the same catch)
What landed at 18% — most things did
18% absorbed the bulk of what used to sit at both 12% and 28%:
- White goods and appliances — ACs, TVs, dishwashers, washing machines
- Cement (down from 28%)
- Small cars (≤1200cc petrol / ≤1500cc diesel, ≤4m length) and motorcycles ≤350cc
- Auto parts, generally
- Apparel and footwear priced above ₹2,500 per piece (up from 12%)
- Restaurant, banquet, and F&B services (unchanged — no change here despite everything else moving)
The 40% slab: luxury and sin goods only
This isn't a general-purpose replacement for the old 28% bracket — it's deliberately narrow:
- Pan masala, gutkha, cigarettes, chewing tobacco
- Aerated and caffeinated beverages (as goods — see the restaurant exception below)
- Motorcycles above 350cc, large/luxury cars and SUVs
- Yachts and private aircraft
- Casino admission, race club betting, and online money gaming
Tobacco and pan masala are a special case. They stayed on their old rate-plus-cess structure until 1 February 2026, because the compensation cess collected on them was earmarked to repay loans the Centre took on during the pandemic to compensate states. Moving them early would have cut off that repayment source, so the government waited until the debt was cleared. From 1 February 2026, pan masala, gutkha, cigarettes, and chewing tobacco moved to 40% GST plus a new Health and National Security Cess and additional excise duty; bidis, separately, moved to 18%.
Compensation cess is (mostly) gone
The compensation cess that used to ride on top of GST for cars, tobacco, and a few other categories was scrapped for everything except pan masala, gutkha, cigarettes, chewing tobacco, and bidis — for the loan-repayment reason above. For every other category, what you see is now the full and final rate.
GST-free insurance — but only for individuals
All individual life and health insurance policies (including family floater health plans) went from 18% to 0% GST from 22 September 2025. Read the fine print before assuming this applies to you: group insurance is unaffected and stays at 18% — so employer-provided group health cover doesn't get cheaper, only a policy you buy for yourself or your family does. The rate that applies is whichever was in force on the date you actually paid the premium, not the policy's start date.
Hotels, restaurants, and spas: the ITC catch
A few service categories got a lower headline rate but lost input tax credit (ITC) along with it — worth knowing if you run one of these businesses:
- Hotel rooms under ₹7,500/night: down from 12% (with ITC) to 5%, but without ITC — you can no longer claim credit on capital goods and input services for these rooms. Rooms above ₹7,500 stay at 18% with full ITC, unchanged.
- Spa, salon, and wellness services: down from 12% (with ITC) to 5%, also without ITC.
- Restaurant and F&B services: unchanged at 18% with full ITC. Aerated drinks served as part of a restaurant meal are taxed as a service at the restaurant's rate, not at the 40% goods rate that applies when you buy a bottle off a shelf.
If your margins depended on claiming ITC on fit-outs or supplies, the lower headline rate may not actually be a saving — run the numbers both ways before assuming it is.
What this means for your invoices and HSN codes
Two practical things change for anyone actually issuing invoices right now:
- The GST rate on your line items may be wrong if you haven't touched your invoice template since before September 2025. CBIC republished an updated HSN-to-rate mapping alongside the new slabs, so the same HSN/SAC code you've always used can now carry a different rate. Before your next invoice run, check the code against the current rate — our HSN/SAC Finder points you to the right heading, though you should confirm the exact 6-8 digit rate on the GST portal since this tool deliberately doesn't hardcode a rate against a code (rates vary at that level and change over time).
- The HSN-digit requirement on invoices hasn't changed — businesses with turnover up to ₹5 crore still need at least a 4-digit HSN code on B2B invoices, and ₹5 crore-plus still needs 6 digits on e-invoices. What's changed is the rate that code now maps to, not the reporting rule itself.
Once you've confirmed the right rate, our GST Invoice Generator already uses the current CGST/SGST/IGST split, and the GST Calculator is the fastest way to double-check a total before it goes out the door.
What's coming next
The 57th GST Council meeting — originally scheduled for 12 September 2026, then moved to 7 October and finally held on 8 October 2026 (the BRICS Leaders' Summit in New Delhi forced the first move) — left the slabs alone. The Finance Ministry's release says the meeting was about process reforms: arrest powers removed, the prosecution limit raised from ₹1 crore to ₹5 crore, faster refunds and simpler registration. It also changes a few narrow rates. Two are notified from 1 November 2026: retreaded tractor tyres at 5% and psyllium seeds (isabgol) exempt. The 5% GST on delivery services through e-commerce platforms by unregistered persons is also notified from 1 November 2026 (Notification 06/2026-Central Tax (Rate)), with the platform paying the tax. Rate changes will be considered only once a year, at a separate meeting. See 57th GST Council Decisions (8 Oct 2026) for the detail. Separately, a fast-track GST registration reform is rolling out for new applicants: businesses assessed as low-risk (broadly, monthly output tax liability under ₹2.5 lakh) can now get approved in about 3 working days through an automated, Aadhaar-based process, covering an estimated 96% of new applicants — worth knowing if you're about to register a new business.
Sources
- Recommendations of the 56th GST Council Meeting — PIB, Government of India
- Exemption of GST on Individual Life and Health Insurance Policies — Department of Financial Services
- GST Rates in India 2026: Updated List of Tax Slabs — ClearTax
- GST 2.0 Reforms in India: New 5% & 18% Slabs Effective September 2025 — Razorpay
- GST on Garments Above ₹2,500 Raised to 18% — TaxGuru
- GST Rate Changes for Hotels & Restaurants Effective 22 September 2025 — TaxGuru
- New Excise Duty on Tobacco and Health Cess on Pan Masala Effective February 1, 2026 — Angel One
- India GST 2.0: HSN-SAC Code Updates Businesses Must Know — India Briefing
- 57th meeting of the GST Council: recommendations (PIB release, 8 October 2026, as reproduced by TaxHeal)
- No UPI MDR discussion at GST Council meet; rates unchanged, ITC protection gets focus — Business Today, 8 October 2026
- 57th GST Council Meeting Rescheduled to October 7, 2026 — TaxGuru
- Fast-Track GST Registration | New Reforms Boost Speed — Corpbiz
This post reflects GST 2.0 as commonly reported, current as of 26 September 2026. GST notifications carry item-level detail down to the 6-8 digit HSN/SAC line that a general guide like this can't fully capture, and rules occasionally get clarified or amended after the fact — confirm your exact code and rate on the GST portal, or with a CA, before filing or pricing anything against it.