Quick answer: India has 3 main GST slabs in 2026 — 5%, 18% and 40%. Essentials are at 0% (nil), and gold, silver and diamonds have their own small rates (3%, 1.5% and 0.25%).
The old 12% and 28% slabs were removed on 22 September 2025. Most 12% items moved to 5%, and most 28% items moved to 18%.
The GST slabs at a glance
Fresh food, milk, paneer, roti, notebooks, health & life insurance
Daily-use goods, medicines, butter, ghee, soap, toothpaste, small hotels
Most goods and services, TVs, ACs, small cars, cement
Tobacco, pan masala, sugary drinks, big cars, betting & gaming
Complete GST rate list for 2026
| Rate | Used for | Common examples |
|---|---|---|
| 0% | Essentials and exempt supplies | Fresh fruit and vegetables, unbranded rice and wheat, UHT milk, paneer, roti, chapati, paratha, notebooks, pencils, erasers, individual health and life insurance, 33 life-saving drugs |
| 0.25% | Rough stones | Rough diamonds, rough precious and semi-precious stones |
| 1.5% | Polished diamonds | Cut and polished diamonds |
| 3% | Precious metals | Gold, silver, jewellery |
| 5% | Everyday goods and services | Soap, shampoo, hair oil, toothpaste, butter, ghee, cheese, namkeen, most medicines, spectacles, bicycles, tractors, hotel rooms up to ₹7,500 a night, salon and gym services |
| 18% | Standard rate | TVs, ACs, dishwashers, small cars, bikes up to 350cc, cement, auto parts, most services (repairs, software, professional fees) |
| 40% | Luxury and sin goods | Pan masala, cigarettes and tobacco, aerated and sugary drinks, mid-size and large cars, bikes above 350cc, yachts, private aircraft, betting, casinos, lottery, online money gaming |
This list shows common examples, not every item. The exact rate always comes from the item's HSN code (goods) or SAC code (services) in the CBIC notification.
What changed: old rate vs new rate
These are the changes small shops ask about most. The new rates apply to invoices dated 22 September 2025 or later.
| Item | Before | Now |
|---|---|---|
| Soap, shampoo, hair oil, toothpaste | 18% | 5% |
| Butter, ghee, cheese, namkeen | 12% | 5% |
| Most medicines | 12% | 5% |
| Hotel room up to ₹7,500 a night | 12% | 5% |
| UHT milk, paneer | 5% | 0% |
| Paratha, parotta | 18% | 0% |
| Notebooks, pencils, erasers | 12% | 0% |
| Health and life insurance (individual) | 18% | 0% |
| TVs, ACs, dishwashers | 28% | 18% |
| Small cars, bikes up to 350cc | 28% + cess | 18% |
| Cement | 28% | 18% |
| Big cars, SUVs, bikes above 350cc | 28% + cess | 40% |
| Aerated and sugary drinks | 28% + cess | 40% |
What is taxed at 40%?
The 40% rate replaces "28% plus compensation cess" for luxury and harmful goods. There is no separate cess on top.
- Tobacco: pan masala, cigarettes, gutkha, chewing tobacco and similar products
- Drinks: aerated, caffeinated and added-sugar beverages
- Vehicles: mid-size and large cars, SUVs, motorcycles above 350cc, yachts and private aircraft
- Services: betting, casinos, gambling, horse racing, lottery and online money gaming
Tobacco products stayed at 28% plus cess until the compensation cess ended, and moved to 40% from 1 February 2026.
Key dates
| Date | What happened |
|---|---|
| 3 Sep 2025 | 56th GST Council meeting approves the two-slab structure (5% and 18%) and the 40% rate |
| 22 Sep 2025 | New rates apply. 12% and 28% slabs removed for almost all items |
| 1 Feb 2026 | Tobacco and pan masala move to 40% as compensation cess ends |
Old bills and credit notes keep the old rate
The rate depends on the original invoice date, not today's date. If you sold a TV on 10 August 2025 at 28% and the customer returns it now, the credit note reverses 28%, not 18%. Never edit old invoices to the new rate.
How to find the right rate for your item
- Find the HSN or SAC code on your purchase bill or the supplier's invoice.
- Check the CBIC rate notification for that code. Note any conditions (for example, "pre-packaged and labelled").
- Ask your accountant if the item fits two descriptions or has an exemption.
- Save the code and rate on the product, so every bill uses it automatically.
- Review rates whenever a new notification comes out.
Composition dealers pay different rates
Composition is a separate scheme with fixed rates on turnover: 1% for traders and manufacturers, 5% for restaurants and 6% for eligible service providers. Composition dealers issue a bill of supply, not a tax invoice, and cannot charge GST to customers.
Set the right rate once in DAM
Open Add Product, enter the HSN code and the GST rate you checked. Then create a test bill through New Sale and check the taxable value and the CGST/SGST or IGST split before you issue a real bill.
Frequently asked questions
How many GST slabs are there in India in 2026?
Three main slabs: 5%, 18% and 40%. Exempt goods are at 0%, and gold, silver and diamonds have special rates of 3%, 1.5% and 0.25%.
Is the 12% GST slab removed?
Yes. From 22 September 2025, almost all 12% items moved to 5%, and a few moved to 18%.
Is the 28% GST slab removed?
Yes. Most 28% items moved to 18%. Luxury and sin goods moved to 40%.
What is the GST rate on most services?
18%. Hotel rooms up to ₹7,500 a night and salon or gym services are at 5%.
Is there cess on top of 40% GST?
No. The 40% rate replaced the old 28% plus compensation cess.
Sources
Content checked on 25 October 2026. Government GST reform explanation (PIB) · CBIC GST rate notifications · GST portal. Examples are for common descriptions. Confirm the rate for your exact HSN/SAC code before billing.
Bill with the right GST rate every time
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