The short answer
Since 22 September 2025, most goods and services in India are taxed at one of two GST rates: 5% for essentials and 18% for most other things. A special 40% rate applies to luxury and sin goods, and many basics are at 0%. The old 12% and 28% slabs are gone for almost all items; tobacco and pan masala moved to the new rates on 1 February 2026. To work out GST, multiply the price before tax by the rate and divide by 100.
What is GST?
GST (Goods and Services Tax) is the tax added to most things you buy in India, from soap to hotel rooms. The seller collects it from you and pays it to the government. Inside one state, the GST is split into two equal halves: CGST for the Centre and SGST for the state. When the seller is in another state, the full amount is charged as IGST. The rate is the same either way; only the split changes.
Knowing the rate helps you check a bill, compare prices that are shown with and without tax, and, if you run a business, invoice correctly. The rate depends on the exact product or service code (HSN for goods, SAC for services), so two similar-looking items can sit in different slabs.
GST rate chart 2026
The GST Council's 56th meeting replaced the old four-slab system (5%, 12%, 18%, 28%) with two main rates and one special rate. Services and most goods moved to the new rates on 22 September 2025. Tobacco products and pan masala followed on 1 February 2026, when the compensation cess on them ended.
| GST rate | What it covers (examples) |
|---|---|
| 0% | Fresh and UHT milk, packaged paneer and chena, Indian breads such as roti and paratha, 33 life-saving drugs, and all individual life and health insurance policies |
| 3% | Gold, silver and jewellery (a long-standing special rate, unchanged) |
| 5% | Soap, shampoo, hair oil, toothpaste, toothbrushes, bicycles, kitchenware, packaged namkeen, sauces, pasta, chocolates, coffee, butter, ghee, most medicines, many medical devices, tractors and farm machinery, handicrafts, hotel rooms up to ₹7,500 a night, gyms, salons and yoga centres |
| 18% | Air conditioners, all TVs, dishwashers, small cars, motorcycles up to 350 cc, three-wheelers, buses and trucks, cement, all auto parts, bidi, and most services such as telecom, banking fees and professional services |
| 40% | Mid-size and big cars, motorcycles above 350 cc, yachts and private aircraft, aerated drinks, pan masala, cigarettes and tobacco products, and betting, casinos, lottery and online money gaming |
What happened to the 12% and 28% GST rates?
Almost everything that was at 12% moved down to 5%, and almost everything at 28% moved down to 18%. A few items went the other way: big cars, bikes above 350 cc, aerated drinks and tobacco now sit at 40%. For most of these, the old rate also carried a compensation cess on top, which the 40% rate replaces.
| Item | Old GST | New GST | Typical price before GST | GST saved |
|---|---|---|---|---|
| Split AC | 28% | 18% | ₹40,000 | ₹4,000 |
| TV above 32 inches | 28% | 18% | ₹45,000 | ₹4,500 |
| Motorcycle up to 350 cc | 28% | 18% | ₹1,20,000 | ₹12,000 |
| Bag of cement | 28% | 18% | ₹400 | ₹40 |
| Hotel room, ₹5,000 a night | 12% | 5% | ₹5,000 | ₹350 |
| Gym membership, a month | 18% | 5% | ₹2,000 | ₹260 |
| Medicines, a month | 12% | 5% | ₹1,000 | ₹70 |
| Family health insurance premium | 18% | 0% | ₹25,000 | ₹4,500 |
| Tractor | 12% | 5% | ₹7,00,000 | ₹49,000 |
Prices here are examples to show the size of the change; your own saving is the old rate minus the new rate, applied to your price before GST.
GST rates one by one
0% GST. Basic food such as fresh milk, fresh vegetables and Indian breads, along with life-saving drugs, education and healthcare services, carries no GST. From 22 September 2025, every individual life insurance policy (term, ULIP or endowment) and every individual health insurance policy, including family floaters and senior citizen plans, is also exempt. Before that, the premium carried 18%.
5% GST. This is now the rate for most things a household buys every week: toiletries, packaged food, kitchenware, most medicines and medical supplies such as bandages and glucometers. Some services moved here too, including hotel rooms up to ₹7,500 a night and beauty and fitness services such as gyms, salons and barbers.
18% GST. The standard rate. It covers most manufactured goods, appliances, small cars and most services, from your phone bill to your bank's fees. If you are unsure of a rate, 18% is the most common answer, but always check the code.
40% GST. A special rate for goods the government wants to tax more heavily: pan masala, cigarettes and other tobacco, aerated drinks, mid-size and large cars, bikes above 350 cc, yachts and private aircraft, and betting and gaming. Pan masala and tobacco also pay a separate cess or excise duty on top, from 1 February 2026.
The price cliffs: where one step changes the rate
Some rates depend on a price or size limit. Cross the limit by a little and the whole amount moves to the higher rate, not just the extra part. These are worth knowing before you book or buy.
- Hotel rooms: a room at ₹7,500 a night pays 5%, so GST is ₹375. A room at ₹7,600 pays 18%, so GST is ₹1,368. So a tariff just ₹100 higher means you pay ₹8,968 instead of ₹7,875.
- Small cars: a petrol, CNG or LPG car up to 1,200 cc, or a diesel car up to 1,500 cc, and no longer than 4 metres, pays 18%. Above either limit it pays 40%. On a car priced at ₹8,00,000 before tax, that is ₹1,44,000 against ₹3,20,000.
- Motorcycles: up to 350 cc pays 18%; above 350 cc pays 40%. On a ₹2,00,000 bike, the difference is ₹44,000.
How to calculate GST
There are two cases. Either you have the price before tax and need to add GST, or you have a price that already includes GST (like an MRP) and want to see how much of it is tax.
GST = Price before GST × Rate ÷ 100
Price before GST = Price with GST × 100 ÷ (100 + Rate)
On a GST-inclusive price, the tax share is always smaller than the rate, because the rate is charged on the lower, pre-tax price. At 5% GST, 4.76% of the final price is tax. At 18% it is 15.25%, and at 40% it is 28.57%. So a ₹1,000 bill at 18% holds ₹153 of GST, not ₹180.
| GST rate | Tax share of a GST-inclusive price | GST inside a ₹1,000 bill |
|---|---|---|
| 5% | 4.76% | ₹48 |
| 18% | 15.25% | ₹153 |
| 40% | 28.57% | ₹286 |
Using an 18% GST calculator
18% is the rate you will use most often. A quick way to do it in your head: 10% of the price, plus 8% of the price. For a price of ₹10,000, GST is ₹1,800 and the total is ₹11,800. Inside one state, that GST is split into CGST of ₹900 and SGST of ₹900.
Worked examples
- Salon bill at 5%: a service priced at ₹2,500 before tax has GST of ₹125, so you pay ₹2,625.
- Laptop repair at 18%: a ₹4,000 repair has GST of ₹720, so you pay ₹4,720.
- Finding the tax inside an MRP: a phone accessory with an MRP of ₹1,180 at 18% has a price before GST of ₹1,000 and GST of ₹180.
- A business invoice with two rates: ₹20,000 of goods at 18% and ₹5,000 at 5% carry GST of ₹3,600 and ₹250. Add each line's GST separately; never apply one rate to the whole bill.
Why some bills did not fall as much as the rate
Hotel rooms up to ₹7,500, standalone restaurants and services such as gyms and salons pay 5% without input tax credit. That means the business can no longer reduce its own tax by the GST it paid on its rent, equipment or supplies. That GST becomes a cost to the business, so some raised their pre-tax price a little after the cut. The GST line on your bill still falls, but the total may drop by less than the rate change suggests.
- A rate cut lowers the tax line, but the seller sets the pre-tax price. Compare the total, not just the GST.
- For goods sold at MRP, the MRP should have fallen after the cut. If a shop still charges the old MRP on new stock, ask for the revised price.
- If you think a rate cut was not passed on, you can complain to the National Consumer Helpline on 1915.
How to read GST on a bill
- GSTIN: the seller's 15-character GST number. A bill that charges GST without one is a warning sign.
- HSN or SAC code: the code for each item, which decides its rate.
- CGST + SGST, or IGST: two equal halves for a seller in your state, one IGST line for a seller in another state. CGST and SGST together should equal the full rate.
- Taxable value: the price before GST. GST is worked out on this, not on the total.
Common mistakes to avoid
- Taking 18% of a GST-inclusive price to find the tax. On ₹1,180 that gives ₹212; the real GST is ₹180.
- Charging CGST and SGST on a sale to another state. That sale needs IGST.
- Using the old 12% or 28% rate from an outdated chart.
- Applying one rate to a mixed bill. Each item carries its own rate.
- Assuming a hotel stay is 5% because the room is cheap per person. The limit is the room tariff per unit per day, not the price per guest.
Tips for using the GST chart
- Search the CBIC rate list by the item's HSN or SAC code, not just its name.
- For big purchases near a limit (a ₹7,500 hotel room, a 1,200 cc car, a 350 cc bike), check which side of the line you fall on.
- Keep invoices for business purchases: a registered business can usually claim back the GST it pays, except where the rate is 5% without credit.
- Rates can change after any GST Council meeting. Check the date on any chart you use.
Recap
- Four slabs became two main rates: 5% and 18%, plus 40% for luxury and sin goods and 0% for basics.
- Most 12% items fell to 5% and most 28% items fell to 18%.
- GST = price before tax × rate ÷ 100. On an inclusive price, the tax share is smaller than the rate.
- Watch the price and size limits: hotel rooms at ₹7,500, cars at 1,200 cc or 1,500 cc and 4 metres, bikes at 350 cc.
Frequently asked questions
What are the GST rates in India in 2026?
The main rates are 5% and 18%, with a special 40% rate for luxury and sin goods. Many basic items are at 0%, and gold and silver stay at 3%.
Is there still a 12% or 28% GST rate?
Not for almost all items. From 22 September 2025, most 12% items moved to 5% and most 28% items moved to 18%. Tobacco and pan masala, which stayed on the old rates for a while, moved to the new structure on 1 February 2026.
How do I calculate 18% GST?
Multiply the price before tax by 18 and divide by 100. On ₹10,000, GST is ₹1,800 and the total is ₹11,800. To take GST out of an inclusive price, divide it by 1.18.
Is there GST on health and life insurance now?
No, for individual policies. Since 22 September 2025, all individual life insurance and individual health insurance policies, including family floaters and senior citizen plans, are exempt from GST.
What is the GST on a hotel room?
5% for a room up to ₹7,500 a night, and 18% above that. The rate depends on the room tariff per unit per day.
Which goods are taxed at 40% GST?
Pan masala, cigarettes and other tobacco products, aerated drinks, mid-size and large cars, motorcycles above 350 cc, yachts and private aircraft, and betting, casinos, lottery and online money gaming.
