Goods and Services Tax (GST) rates in India are crucial for every segment of the economy. Every time the GST Council meets, Indian enterprises and consumers alike are watching out for the next set of GST rate changes. India’s GST regime is undergoing a landmark transformation with the 56th GST Council meeting unveiling GST 2.0 – next-generation reforms simplifying tax slabs to 5%, 18%, and 40%. Effective from September 22, 2025, these reforms aim to ease compliance, boost consumption, and fuel economic growth.
Latest Updates
1. The most awaited 56th GST Council meeting happened 3rd September 2025. The council rationalised the GST rate structure from four GST slabs (5%, 12%, 18%, 28%) to a simplified structure:
- Standard rate: 18% – Applicable to most goods and services
- Merit rate: 5% – For essential items and priority sectors
- Demerit rate: 40% – Selective application to sin goods and luxury items
2. GST on individual health & life insurance has been made exempted.
3. GST on dairy products, 33 lifesaving drugs and educational essentials have been brought down to Nil rate.
4. GST on daily essentials, agriculture goods, health care equipment have been brought down to 5%.
5. GST on electronic appliances, small cars and motor cycles (≤350cc) have been brought down to 18%.
6. GST on sin goods such as pan masala, aerated waters, caffeinated beverages, carbonated beverages of fruit drinks / with fruit juice has been increased to 40%.
7. All these GST rate changes will be effective from 22nd Sept 2025 except tobacco products.T
This GST rates in India 2025 guide breaks down GST rate structures, latest changes, and item-wise tax lists to help you stay informed and compliant.
GST Rates Meaning
GST rate in India means a tax percentage applied on the sale of goods or services.
In simple words, every business registered under GST must raise invoices with GST amounts charged on the taxable supply value. These GST amounts are derived by multiplying a tax percentage with taxable supply value. Such as percentage rate refers to the GST rate. For instance, in the example where GST of Rs.1,800 is charged on taxable value of Rs.10,000. Here, 18% is the GST rate.
GST Rate Changes from 56th GST Council Meeting
GST reforms represent the most comprehensive GST rate overhaul since the introduction of GST, directly impacting financial strategies, cash flows, and competitive positioning.
GST rate cuts-
| Category | Items | From (%) | To (%) |
| Daily Essentials | Hair Oil, Shampoo, Toothpaste, Toilet Soap Bar, Tooth Brushes, Shaving Cream | 18 | 5 |
| Butter, Ghee, Cheese & Dairy Spreads | 12 | 5 | |
| Pre-packaged Namkeens, Bhujia & Mixtures | 12 | 5 | |
| Utensils | 12 | 5 | |
| Feeding Bottles, Napkins for Babies & Clinical Diapers | 12 | 5 | |
| Sewing Machines & Parts | 12 | 5 | |
| Uplifting Farmers & Agriculture | Tractor Tyres & Parts | 18 | 5 |
| Tractors | 12 | 5 | |
| Specified 12 bio-pesticides and micro-nutrients | 12 | 5 | |
| Drip Irrigation System & Sprinklers | 12 | 5 | |
| Agricultural, Horticultural or Forestry Machines (Soil Preparation, Cultivation, etc.) | 12 | 5 | |
| Healthcare Sector | Individual Health & Life Insurance | 18 | Nil |
| Thermometer | 18 | 5 | |
| Medical Grade Oxygen | 12 | 5 | |
| All Diagnostic Kits & Reagents | 12 | 5 | |
| Glucometer & Test Strips | 12 | 5 | |
| Corrective Spectacles | 12 | 5 | |
| 33 drugs and medicines, listed in the press release | 12 | Nil | |
| Agalsidase Beta, Imiglucerase and Eptacog alfa activated recombinant coagulation factor VIIa drugs | 5 | Nil | |
| Drugs and medicines such as Faricimab, Pertuzumab, Fluticasone Furoate + Umeclidinium + Vilanterol FF/UMEC/VI, Ocrelizumab, and Brentuximab Vedotin | 12 | 5 | |
| Automobiles | Petrol & Petrol Hybrid, LPG, CNG Cars (≤1200cc & ≤4000mm) | 28 | 18 |
| Diesel & Diesel Hybrid Cars (≤1500cc & ≤4000mm) | 28 | 18 | |
| Three wheelers | 28 | 18 | |
| Motorcycles (≤350cc) | 28 | 18 | |
| Motor Vehicles for the transport of goods | 28 | 18 | |
| Education | Maps, Charts & Globes | 12 | Nil |
| Pencils, Sharpeners, Crayons & Pastels | 12 | Nil | |
| Exercise Books & Notebooks | 12 | Nil | |
| Eraser | 5 | Nil | |
| Electronic Appliances | Air Conditioners | 28 | 18 |
| Television (above 32″) (inc. LED & LCD TVs) | 28 | 18 | |
| Monitors & Projectors | 28 | 18 | |
| Dish Washing Machines | 28 | 18 |
GST rate hikes-
| Category | Item description | From (%) | To (%) |
| Mining | Coal, lignite, peat | 5 | 18 |
| Sin goods | tobacco/ pan masala* | 28 | 40 |
| Aerated waters | 28 | 40 | |
| Caffeinated beverages | 28 | 40 | |
| Carbonated beverages of fruit drinks / with fruit juice | 28 | 40 | |
| Other non‑alcoholic beverages | 18 | 40 | |
| Motor cars and larger hybrids (beyond small‑car thresholds) | 28 | 40 | |
| Motorcycles exceeding 350cc | 28 | 40 | |
| Aircraft for personal use | 28 | 40 | |
| Yachts and vessels for pleasure/sports | 28 | 40 | |
| Smoking pipes and cigarette/cigar holders | 28 | 40 | |
| Revolvers & pistols | 28 | 40 | |
| Admission to casinos, race clubs, and sporting events like IPL | 28% with ITC | 40% with ITC | |
| Licensing of bookmakers by race clubs | 28% with ITC | 40% with ITC | |
| Specified actionable claims (betting, casinos, gambling, horse racing, lottery, online money gaming) | 28% with ITC | 40% with ITC | |
| Leasing/rental without operator of goods attracting 40% GST | 28% with ITC | 40% with ITC | |
| Paper sector | Dissolving‑grade chemical wood pulp | 12 | 18 |
| Various papers/paperboards, other than exercise‑book paper | 12 | 18 | |
| Textiles | Apparel/Made‑ups > Rs 2,500 per piece | 12 | 18 |
| Quilted/cotton quilts and quilted products more than Rs.2,500 per piece | 12 | 18 |
* To come into effect at a later date (not from 22nd Sept, 2025) through a notification, after the loan and interest obligations under the compensation cess are discharged.