Understanding the fundamentals of GST tax rates is crucial for businesses and consumers alike. The Goods and Services Tax (GST) is an indirect tax imposed on the supply of goods and services. It has simplified the previous complex tax structure by introducing a unified tax system. The GST rates are categorised into different slabs based on the nature of goods or services.
This article will detail the GST rates applicable for various goods and services. We will delve into the significance of these rates, the rationale behind the tax slabs, and the latest revisions.
Table of Contents
GST Rate Updates
- The GST rate slabs on electric vehicles have been reduced from 12% to 5%, and the GST rate on chargers or charging stations for electric vehicles has been reduced from 18% to 5%, to promote the adoption of eco-friendly transportation.
- The GST rate on mobile phones and specified parts has been increased from 12% to 18% to correct the inverted duty structure and provide relief to the domestic industry.
- The GST registration threshold is ₹40 lakh for goods and ₹20 lakh for services, except in some states where the limit is ₹10 lakh. That means GST for small business, with turnover below the threshold limit are exempted.
The GST Rates in India for 2024 (Old vs New)
In 2024, the GST tax rates for many products changed. Some products are now categorised under higher GST slab rates, 2024, while few are in the lower slabs.
Here’s the GST rate list for the products for which the GST rates have been increased.
Items |
Old Rate |
New Rate |
| Scrap and polyurethanes | 5% | 18% |
| Printed material | 12% | 18% |
| Broadcasting, licensing, and sound recordings | 12% | 18% |
| Several renewable energy devices | 5% | 12% |
| Railways goods and parts under Chapter 86 | 12% | 18% |
| Metal concentrates and ores | 5% | 18% |
| Packing containers and boxes | 12% | 18% |
| Pens | 12% | 18% |
| Recorded media print and reproduction | 12% | 18% |
Here’s the GST rate list for the products for which the GST rates have been decreased
Items |
Old Rate |
New Rate |
| Keytruda for cancer treatment | 12% | 5% |
| Vehicles equipped with retrofitting kits for disabled people | Applicability | 5% |
| IGST levied on goods sold at the Indo-Bangladesh border | Applicability | Nil |
How Many Types of GST Slab Rates in India?
As of 2024, the GST slab rates in India are divided into five categories: nil, 5%, 12%, 18%, and 28%. Additionally, some products and services are subject to a cess, which is a surcharge levied over and above the GST rate. It is levied to compensate the states for any revenue loss due to the implementation of GST rules.
GST Rate |
Examples of Goods |
Examples of Services |
| Nil | Milk, eggs, fresh fruits and vegetables, salt, bread, etc. | Education, health, public transport, etc. |
| 5% | Sugar, tea, coffee, edible oil, spices, etc | Railways, air transport, restaurants (without AC or liquor licence), etc. |
| 12% | Butter, cheese, ghee, mobile phones, etc. | Non-AC hotels, business class air tickets, etc |
| 18% | Biscuits, cakes, pastries, footwear above ₹1000, etc. | AC hotels, IT services, telecom services, etc. |
| 28% | Chocolate, aerated drinks, cosmetics, automobiles, etc. | Five-star hotels, cinema, racing, gambling, etc. |
The GST rate structure significantly affects pricing, costing, and profitability for businesses. A clear understanding of these GST rates fosters transparency and facilitates fair transactions, benefiting businesses and consumers.
GST Rate Structure in India 2024
The GST is a detailed, multi-stage, destination-based tax levied on every value addition. Introduced on July 1, 2017, GST replaced many indirect taxes previously existing in the country. As a single domestic indirect tax law for the country, it has made tax compliance easier and more transparent.
The primary GST slabs applicable to regular taxpayers are 0%, 5%, 12%, 18%, and 28%. There are also less commonly used rates, such as 3% and 0.25%. Additionally, taxable composition persons are required to pay General Service Tax at lower or nominal rates, ranging from 1.5% to 6% on their turnover.
To provide clarity on the various categories falling under each slab, let’s explore some examples of products and services and their corresponding GST rates.
Under the 0% tax slab, we have essential items like milk, eggs, curd, lassi, kajal, education services, health services, children’s drawing and colouring books, unpacked foodgrains, unpacked paneer, gur (jaggery), unbranded natural honey, fresh vegetables, salt, unbranded atta (flour), unbranded maida (refined wheat flour), besan (chickpea flour), prasad (offerings made to deities), and phool bhari jhadoo (broom).
Moving on to the 5% slab, we find products such as sugar, tea, packed paneer (cottage cheese), coal, edible oils, raisins, domestic LPG (liquefied petroleum gas), roasted coffee beans, PDS kerosene (public distribution system kerosene), skimmed milk powder, cashew nuts, footwear costing less than ₹500, milk food for babies, apparels costing less than ₹1000, fabric, coir mats, matting, and floor covering, spices, agarbatti (incense sticks), coal, mishti/mithai (Indian sweets), coffee (except instant), and life-saving drugs.
In the 12% slab, we have items like butter, ghee (clarified butter), computers, processed food, almonds, mobiles, fruit juice, preparations of vegetables or fruits, packed coconut water, and umbrellas.
Moving up to the 18% slab, we find hair oil, capital goods, toothpaste, industrial intermediaries, soap, ice cream, pasta, toiletries, cornflakes (breakfast cereal), soups and printers.
Finally, products falling under the 28% tax slab include small cars with an additional 1% or 3% cess based on engine capacity (excluding electric vehicles), high-end motorcycles with a 15% cess imposed on top of the base rate of 28%, and for cigarettes and tobacco products, cess rates vary widely (from 11% to 290%).
GST rates profoundly influence both businesses and consumers and directly impact their pricing strategies, profit margins, and purchasing power. Understanding the GST rate structure is essential for businesses to navigate compliance requirements effectively and formulate strategic plans.
The Latest GST rate revision in the Council Meeting
The following are the latest GST Council Meetings where the revised GST rates were announced.
GST Rate Revision in 50th GST Council Meeting
During this meeting, held on 11th July 2023, several key revisions were made to the existing GST rate list.
The detailed GST updates of the meeting are outlined below.
Items |
Old Rate |
New Rate |
| Cancer-Related Medicine | – | Exempt |
| Imitation Zari Thread | 12% | 5% |
| Food for Special Medical Purposes (FSMP) | – | Exempt |
| Unfried, Uncooked, and Extruded Snack Palettes | 18% | 5% |
| Medicines for Rare Diseases | – | Exempt |
| LD Slag | 18% | 5% |
| Beverages in Cinema Halls | 18% | 5% |
| Casinos & Horse Racing | 18% | 28% |
| Fish Soluble Paste | 18% | 5% |
Besides this, the council recommended reducing the late fee for delayed filing of GSTR-3B returns for small businesses with nil tax liability.
GST Rate Revision in 49th GST Council Meeting
The 49th meeting of the GST Council convened on 18th February 2023 in Delhi. During the meeting, it was announced that the states in India would receive clearance of compensation cess for June 2022, alongside introducing rate reductions for specific items.
Items |
Old Rate |
New Rate |
| Pencil Sharpener | 18% | 12% |
| Rab | 18% | 5% (if prepackaged else Nil) |
List of items that have become expensive and cheaper.
Costly Items |
Cheaper Items |
| Court-related services
Guthka Pan Masala Chewing Tobacco |
Liquid Jaggery
Data loggers Coal rejects Pencil sharpener Entrance exam fee organised by NTA |
GST Rate Revision in 48th GST Council Meeting
At the 48th Council meeting, eight of the fifteen agenda points were deliberated upon, covering topics such as data sharing. The remaining matters encompass revenue enhancement, the establishment of a GST appellate tribunal, and taxation on pan and Gutkha.
Notably, the GST rates have been reduced for the following items:
Items |
Old Rate |
New Rate |
| Mentha arvensis sale | No RCM | Under RCM |
| Cattle feed, including chuni or churi, khanda, chilka, pulse husks, and concentrates | 5% | Nil |
| Retailed to refineries ethyl alcohol | 18% | 5% |
The rate adjustments were influenced by various factors, including the need to stimulate economic growth, rationalise the tax structure, and address revenue considerations.
Cement, footwear, hotels, and textile and apparel are some sectors that have benefited from this meeting.
GST Rate Revision in 47th GST Council Meeting
On 13 July 2022, the Central Government issued nine notifications from 3/22 to 11/22. New GST rates took effect on 18 July 2022.
Let’s look at more details.
1. Items With Increased Prices
Due to the rate revisions mentioned below, certain items experienced price increases.
Items |
Old GST Rate |
New GST Rate |
| Tetra packs | 12% | 18% |
| Polished and cut diamonds | 0.25% | 1.50% |
| Tar | 5%, 18% | 18% |
2. Items With Decreased Prices
The key reductions announced in this meeting, that make the products cheaper are:
Items |
Old GST Rate |
New GST Rate |
| Importing Diethylcarbamazine (DEC) pills | 5% | Nil |
| Importation of specific defence products | Applicable rates | Nil |
| Ostomy Appliances | 12% | 5% |
| Orthopaedic appliances | 12% | 5% |
| Ropeway transportation of cargo and person | 18% | 5% |
| Renting cost of a truck or goods wagon, with fuel | 18% | 12% |
3. Elimination of GST Exemptions
The 47th GST Council Meeting also focused on eliminating certain GST exemptions. This move aimed to simplify the tax structure and promote uniformity.
Some exemptions that were removed include:
Items |
New Rate |
| Any type of printed map | 12% |
| Parts of goods of heading 8801 | 18% |
| Cheques, lose or in book form | 18% |
| Room rent (excluding ICU) is over ₹5,000 per patient per day. | 5% |
| Hotel stays up to ₹1,000 per day | 12% |
| Bio-medical waste treatment facilities | 12% |
4. Correction of Inverted Tax Structure
Another noteworthy aspect of the meeting was correcting the inverted tax structure in specific sectors or industries. The inverted tax structure occurs when the tax rate on inputs is higher than that on finished goods, leading to a blockage of input tax credit. The corrective measures taken during this meeting aim to streamline taxation and reduce compliance burdens.
Products |
Old rate |
New rate |
| Solar water heaters | 5% | 12% |
| Finished, composition, or composition leathers | 5% | 12% |
| Job for processing of hides, skins, leather, making of identical products, and clay brick manufacturing | 5% | 12% |
| Engagements and subcontracts involving earthwork undertaken with central, state, union territories, and local governmental bodies. | 5% | 12% |
| Air-based wet grinder, atta chakki, sorting, washing, or grading equipment for grain pulses and seeds | 5% | 18% |
| Ink for writing, drawing, and printing | 12% | 18% |
| Dairy machinery | 12% | 18% |
| Lights and fixture | 12% | 18% |
| Marking out instruments | 12% | 18% |
| Paper knives, pencil sharpeners, and cutting blades | 12% | 18% |
GST Rate Revision in 45th GST Council Meeting
The 45th GST council meeting was held on 17th September 2021 and the following decisions had been taken revolving around the GST rates.
Category |
Old Rate |
New Rate |
| Railway goods, locomotives, and parts | 12% | 18% |
| Pens | 12% | 18% |
| Metal concentrates and ores | 5% | 18% |
| Renewable energy devices | 5% | 12% |
| Printed material | 12% | 18% |
| Scrap and plastic waste | 5% | 18% |
GST Rate Revision in 44th GST Council Meeting
The 44th GST council meeting was held on 12th June 2021 and the following decisions had been taken regarding the GST rates effective up to 30th September 2021.
Category |
Old Rate |
New Rate |
| Hand sanitisers | 18% | 5% |
| Equipment to check body temperature | 18% | 5% |
| Ambulances | 28% | 12% |
| Testing kits | 12% | 5% |
GST Rate Revision in 43rd GST Council Meeting
- GST on the export of relief goods will be exempted and will stay in effect until 31 August 2021.
- GST on import of certain medicines are also placed under the exemption list.
- Any Covid-related relief item imported to donate to the government or any relief organization will be exempted from IGST till 31 August 2021.
- The Amnesty Scheme was announced by the finance minister to reduce late fee returns. Small taxpayers can file GST returns under this scheme.
GST Rate Revision in the 42nd GST Council Meeting
Here are the highlights of the meeting held on October 5, 2021.
- Small taxpayers with a turnover of less than ₹ 5 crore can now file quarterly GSTR-3B and GSTR-1 forms where the due date for GSTR-1 will be the 13th day of the month succeeding the quarter.
- The quarterly taxpayers have the option of paying 35% of the net tax liability of the previous quarter, using an auto-generated challan for the first two months of the quarter.
- For the auto-generation of GSTR-3B, a roadmap is prepared, where the details of the supplier’s GSTR-1 will help in auto-populating the ITC. Taxpayers will pay their GST through a simple challan.
- Taxpayers with a turnover of ₹ 5 crore and above will have to mention a 6-digit HSN code. A 4-digit HSN code is to be mentioned by taxpayers with a turnover of less than ₹ 5 crore.
- Bank accounts which have their PAN linked with Aadhaar will be able to receive refunds.
- ISRO, Antrix Corporation, and New Space India Limite (NSIL) will receive GST exemptions to encourage space launching services in India.
- Sanitisers that are non-alcoholic will continue to be taxed at 18% GST.
- The compensation cess collected to date amounts to ₹ 20,000 crore. This amount was disbursed to specific states in India by 5 October 2020.
GST Rate Revision in the 41st GST Council Meeting
The 41st GST Council meeting was chaired by the Union Finance Minister and was held on 27 August 2020. The new revision states the government will provide an additional 0.5% relaxation in states where the borrowing limit is under the FRBM Act. States can now borrow more due to the damage caused by the coronavirus outbreak.
HSN and SAC System in GST Tax Classification
The HSN & SAC codes are two coding systems that classify goods and services for taxation under the GST regime. HSN stands for Harmonised System of Nomenclature, and SAC means Service Accounting Code. These codes are essential for determining the correct applicable tax rate and facilitating international trade and compliance.
Classification of HSN System
The HSN system, created by the WCO and used by India in 1986, is a global way of naming and numbering traded goods for tax and trade purposes. It has 21 sections, 99 chapters, 1244 headings, and 5224 subheadings, each with a six-digit code. The code can have two more digits for domestic use.
The code structure is:
- First two digits: chapter number
- Next two digits: heading number
- Next two digits: subheading number
- Last two digits: further subheading number
The HSN system helps to:
- Classify goods consistently across regions
- Identify and describe goods easily
- Avoid disputes and lawsuits
- Simplify customs processes and documents
- Collect and analyse trade data
For example, the HSN code for rice is 1006, which means it is in section 2 (vegetables), chapter 10 (cereals), heading 06 (rice), and no further subheading. The code also shows the tax rate, which is 5% under GST.
Businesses and tax authorities must use the right HSN codes, as any mistake can cause:
- Wrong tax calculation
- Delayed or denied tax credit
- Penalty or interest for breaking the rules or hiding tax
- Trouble in filing returns and matching invoices
- Problems or seizure of goods at the customs
Classification of SAC System
The SAC system is a code-based classification of services under GST issued by the Central Board of Excise and Customs (CBEC) department. It is derived from the United Nations Central Product Classification (CPC). The SAC system has 99 sections, each identified by a two-digit code.
The structure of the SAC code is as follows:
- The first two digits denote the section number
- The next two digits denote the chapter number
- The subsequent two digits denote the heading number
- The final two digits denote the subheading number
The SAC system helps to standardise, simplify, reduce, enhance, streamline, and promote various aspects of service taxation. The SAC code also determines the tax rate for the service, which varies depending on the service category and location. Service providers and tax authorities should use the correct and updated SAC codes to avoid errors and mismatches.
Conclusion
The GST system is vital for consumers and businesses, making taxation easier by applying the same rates to goods and services. The GST has five different slabs, and some products may have extra cess. In 2024, the GST rates changed for some products, either increasing or decreasing them. These changes aimed to improve the tax system and boost the economy.
FAQs on GST rates
1. What is the GST rate on gold in India?
The GST rate of gold in India is 3%.
2. What is the GST rate on mobile phones?
The GST rate on mobile phones is 18%.
3. Who decides GST rates?
The Central Government decides the GST rates in the country.
4. What is the GST rate on laptops?
The GST rate on laptops is 18%.
5. What is the GST rate on cement?
The GST rate on cement is 28%.
6. What is The Highest rate of GST?
The highest GST rate is 28%.
7. What are the 3 types of GST?
The three types of GST are IGST, SGST, and CGST.
8. Is GST charged on milk?
Fresh and pasteurised milk is fully exempt from GST.
9. Who must pay the GST rate?
The supplier of the product is responsible for paying GST.
