GST rates & slabs in India

India's GST structure

Goods and Services Tax (GST) in India is a dual tax: the Centre levies CGST (Central GST) and the state levies SGST (State GST) for intra-state transactions. For inter-state transactions, the Centre levies IGST (Integrated GST) at the combined rate. The GST Council decides the applicable rate for every category of goods and services, which is then notified by the government.

The main rate schedules are Notification No. 1/2017-CT(Rate) for goods and Notification No. 11/2017-IT(Rate) for services. Both are available on the GST portal and are updated periodically.

The five main GST slabs

0% — Essential goods and services

The 0% slab (also called nil-rated) covers goods and services considered essential, or those deliberately kept outside the tax net. Key examples:

• Food: Fresh fruits and vegetables, milk, eggs, unprocessed cereals (rice, wheat, pulses), salt, fresh meat, fish and poultry (unprocessed)
• Agriculture inputs: Seeds, fertilisers, soil-testing kits
• Health: Most medicines and life-saving drugs notified by the government, contraceptives
• Education: Services by educational institutions up to higher secondary level, coaching services for competitive exams (from 2024)
• Handloom and handicraft: Khadi fabric, coir products, handmade lace
• Others: Postal services by India Post, natural honey, fresh flowers

5% — Basic necessities and processed food

The 5% slab targets goods that need a moderate level of taxation without burdening consumers significantly:

• Processed food: Packaged frozen vegetables, fish (processed/frozen), ice cream (plain, without sugar additions), branded namkeen and mixtures
• Fuel: Coal, briquettes
• Textiles: Fabric (cotton, silk, wool, man-made fibres up to a threshold)
• Services: Restaurant food (standalone restaurants, not in high-tariff hotels), economy class air travel, transport of goods by road (GTA), life insurance (term policies), healthcare services
• Construction materials: Sand, gravel, marble and granite (cut into blocks, not polished)

12% — Standard goods and services

The 12% slab covers a broad range of manufactured goods and services:

• Food and beverages: Butter, ghee, cheese, dry fruits (in packages), fruit juices, packed coconut water, condensed milk
• Manufactured goods: Sewing machines, umbrella, mobile phones (moved from 18% to 12% in some notifications — verify current rate), spectacles including frames and lenses
• Construction: Affordable housing (projects approved under PMAY or government schemes up to 60 sq m)
• Services: Business class air travel, non-air-conditioned non-sleeper class train travel, work contracts for government projects
• Printing: Books, maps, charts printed for export; brochures with advertising content

18% — Most goods and services

The 18% slab is the most common rate and applies to the majority of manufactured goods and most services:

• Manufactured goods: Refrigerators, washing machines, vacuum cleaners, cameras, televisions (below 32 inches moved to 28% in some updates — verify), paints and varnishes, perfumes, shampoo, soap
• Services: IT services (software development, SaaS, cloud), financial services (banking fees, broking), telecom services, hotel accommodation above ₹1,000 per night (and up to ₹7,500 per night for 18% in some categories), real estate (commercial properties under construction), audit and CA services
• Capital goods: Industrial machinery, computers and peripherals, printers
• Others: Branded garments (above ₹1,000 per piece), mineral water, toothpaste, hair oil

28% — Luxury and demerit goods

The highest slab targets luxury items, sin goods and goods with negative externalities:

• Vehicles: Motor vehicles (passenger cars), motorcycles above 350cc, aircraft for personal use
• Electronics and appliances: Air conditioners, large television sets (above 32 inches in some categories), dishwashers, cement
• Demerit goods: Pan masala, chewing tobacco, cigars, cigarettes (also subject to cess), aerated drinks
• Luxury: Yachts, private jets, racing cars
• Services: Five-star hotel accommodation, race club admissions, gambling, restaurants in hotels with room tariff above ₹7,500

Special GST rates

GST Compensation Cess

On top of the regular 28% GST, certain demerit goods attract an additional GST Compensation Cess. This cess was introduced under the GST (Compensation to States) Act to compensate states for revenue shortfalls during the GST transition period. Examples:

• Aerated drinks: 12% cess
• Small cars (petrol below 1,200cc, under 4 m): 1% cess
• Mid-size/large cars: 15–20% cess
• SUVs: 22% cess
• Cigarettes: specific rate cess per stick
• Coal: ₹400 per tonne

Composition scheme — flat rates for small businesses

Businesses with annual turnover up to ₹1.5 crore (₹75 lakh for some states, ₹50 lakh for service providers) can opt for the Composition Scheme. Instead of slab-based GST, they pay a flat quarterly rate on turnover:

Composition taxpayers cannot collect GST separately on invoices, cannot claim ITC, and cannot make inter-state outward supplies. See the GST composition scheme guide for a full eligibility breakdown.

How to find the right GST rate for your product

The definitive way to determine the GST rate for any product or service is through the HSN (Harmonised System of Nomenclature) code:

1. Use the HSN code finder or the CBIC HSN search at cbic-gst.gov.in to find your product's HSN code.
2. Cross-reference the HSN code against the GST rate schedules in Notification 1/2017-CT(Rate) (for goods) or Notification 11/2017-IT(Rate) (for services), available on gst.gov.in.
3. When in doubt — especially for novel products, software or composite supplies — seek an advance ruling from the state Authority for Advance Rulings (AAR) or consult a CA.

How BillRaja handles GST rates

BillRaja supports all five GST slabs (0, 5, 12, 18 and 28%) plus the special gold rate. When you create a product, you enter its HSN code and GST rate once — BillRaja then applies the correct CGST+SGST (for intra-state sales) or IGST (for inter-state sales) on every invoice automatically. The GST calculator lets you cross-check individual amounts before billing.