Last updated: Reflects the 56th GST Council Meeting decisions and revised rates effective from 22 September 2025
The 56th GST Council meeting rewrote the rate book. From 22 September 2025, India runs on a much simpler structure: 5%, 18%, and 40%, with a 0% slab for essentials. The old 12% and 28% slabs? Gone.
This guide walks you through everything that changed – the rate cuts, the rate hikes, the full item-wise tables for each slab, an HSN chapter quick-reference, and a plain-English summary of the official notifications. Whether you’re an SMB owner updating your billing system, an accountant preparing GSTR-1, or a consumer wondering why prices shifted, this is your one-stop reference.
If you only have 30 seconds, here’s the list:
| Aspect | Before 22 Sept 2025 | After 22 Sept 2025 |
|---|---|---|
| Number of main slabs | 5 (0%, 5%, 12%, 18%, 28%) | 3 (5%, 18%, 40%) plus 0% nil-rated |
| Health & life insurance (individual) | 18% | Nil (Exempt) |
| Small cars, two-wheelers ≤350cc | 28% + cess | 18% |
| ACs, large TVs, dishwashers | 28% | 18% |
| Hair oil, shampoo, soap, toothpaste | 18% | 5% |
| Butter, ghee, paneer, packaged namkeen | 12% | 5% |
| 33 life-saving drugs | 12% | Nil |
| Notebooks, pencils, maps, crayons | 12% | Nil |
| Pan masala, large cars, aerated drinks | 28% (+ cess) | 40% |
| Coal, lignite, peat | 5% | 18% |
A GST rate is just the percentage of tax added on top of the value of any taxable supply of goods or services in India. Simple enough – but it shows up on your invoice in three different forms depending on the transaction:
Here’s a quick example. You sell goods worth ₹10,000 in an intra-state sale at 18%. Your invoice will show ₹900 CGST + ₹900 SGST = ₹1,800 GST. For an inter-state sale of the same goods, you’d charge ₹1,800 IGST instead.
Why does the rate matter so much for your business? Because it directly decides:
Get the rate wrong, and the consequences ripple across every invoice and every return.
After the 56th Council meeting, the GST world looks a lot cleaner. Think of it as four buckets:
| Slab | What It Covers | Examples |
|---|---|---|
| 0% (Nil-rated) | Essentials, life-saving drugs, individual insurance, education materials | Fresh fruits, vegetables, milk, paneer, bread, exercise books, pencils, sanitary napkins |
| 3% | Gold, silver, platinum, jewellery, imitation jewellery | Gold biscuits, gold/silver ornaments, coins |
| 0.25% | Rough diamonds and unstrung precious/semi-precious stones | Uncut diamonds, raw rubies, sapphires |
| 5% | Mass-market essentials and key inputs | Edible oils, packaged namkeen, butter, ghee, footwear ≤₹2,500, fertilizers, tractors |
| 18% | Standard rate for most goods and services | Mobiles, ACs, cement, IT services, small cars, motorcycles ≤350cc |
| 40% | Sin goods and luxury goods | Aerated drinks, large luxury cars, motorcycles >350cc, yachts, betting, casinos |
| 28% (residual) | Pan masala and tobacco (until cess obligations clear) | Pan masala, cigarettes, bidis |
A few special rates continue alongside this:
This wasn’t a small tweak – it was the most significant rate restructuring since GST began in 2017. The headline decisions:
These changes came through Notifications 09/2025-CTR to 17/2025-CTR dated 17 September 2025, taking effect 22 September 2025. The tobacco and pan masala move to 40% has been deferred until compensation cess obligations are settled.
This is the part most consumers and businesses care about. Here’s the full picture, broken down by sector.
The biggest household-level wins are here.
| FMCG Items | Old Rate | New Rate |
|---|---|---|
| Hair oil, shampoo, toothpaste, toilet soap, toothbrushes, shaving cream | 18% | 5% |
| Butter, ghee, cheese, dairy spreads | 12% | 5% |
| Pre-packaged namkeen, bhujia, mixtures | 12% | 5% |
| Kitchen utensils | 12% | 5% |
| Feeding bottles, baby napkins, clinical diapers | 12% | 5% |
| Sewing machines & parts | 12% | 5% |
A clear push to make farming inputs more affordable.
| Agriculture Items | Old Rate | New Rate |
|---|---|---|
| Tractor tyres & parts | 18% | 5% |
| Tractors | 12% | 5% |
| 12 specified bio-pesticides & micro-nutrients | 12% | 5% |
| Drip irrigation & sprinkler systems | 12% | 5% |
| Agricultural / horticultural / forestry machines | 12% | 5% |
Easily the most socially impactful set of changes.
| Healthcare Items | Old Rate | New Rate |
|---|---|---|
| Individual health & life insurance | 18% | Nil |
| Thermometers | 18% | 5% |
| Medical-grade oxygen | 12% | 5% |
| Diagnostic kits & reagents | 12% | 5% |
| Glucometers & test strips | 12% | 5% |
| Corrective spectacles | 12% | 5% |
| 33 specified life-saving drugs | 12% | Nil |
| Agalsidase Beta, Imiglucerase, Eptacog alfa | 5% | Nil |
| Faricimab, Pertuzumab, Ocrelizumab, Brentuximab Vedotin | 12% | 5% |
Small-car buyers and two-wheeler riders win big here.
| Automobile Items | Old Rate | New Rate |
|---|---|---|
| Petrol, petrol-hybrid, LPG, CNG cars (≤1200 cc, ≤4000 mm) | 28% (+ cess) | 18% |
| Diesel & diesel-hybrid cars (≤1500 cc, ≤4000 mm) | 28% (+ cess) | 18% |
| Three-wheelers | 28% | 18% |
| Motorcycles ≤350 cc | 28% | 18% |
| Goods transport vehicles | 28% | 18% |
Back-to-school just got cheaper.
| Education Supplies Items | Old Rate | New Rate |
|---|---|---|
| Maps, charts, globes | 12% | Nil |
| Pencils, sharpeners, crayons, pastels | 12% | Nil |
| Exercise books & notebooks | 12% | Nil |
| Erasers | 5% | Nil |
Festive-season shopping looks far more attractive now.
| Electronics Items | Old Rate | New Rate |
|---|---|---|
| Air conditioners | 28% | 18% |
| Televisions above 32″ (LED & LCD) | 28% | 18% |
| Monitors & projectors | 28% | 18% |
| Dishwashers | 28% | 18% |
The flip side – sin goods, luxury items, and a few inputs went up.
| Luxury Items | Old Rate | New Rate |
|---|---|---|
| Tobacco & pan masala* | 28% | 40% |
| Aerated waters & soft drinks | 28% | 40% |
| Caffeinated beverages | 28% | 40% |
| Carbonated fruit drinks / fruit-juice drinks | 28% | 40% |
| Other non-alcoholic beverages | 18% | 40% |
| Large cars & big hybrids (above small-car limits) | 28% (+ cess) | 40% |
| Motorcycles >350 cc | 28% | 40% |
| Aircraft for personal use | 28% | 40% |
| Yachts and pleasure/sports vessels | 28% | 40% |
| Smoking pipes, cigar/cigarette holders | 28% | 40% |
| Revolvers & pistols | 28% | 40% |
| Casinos, race clubs, IPL & sports event tickets | 28% (with ITC) | 40% (with ITC) |
| Online money gaming, betting, lottery, gambling | 28% (with ITC) | 40% (with ITC) |
*Tobacco and pan masala move to 40% on a date to be notified later – once the compensation-cess loan obligations have been discharged.
| Other Items | Old Rate | New Rate |
|---|---|---|
| Coal, lignite, peat | 5% | 18% |
| Apparel & made-ups above ₹2,500 per piece | 12% | 18% |
| Quilted/cotton quilts above ₹2,500 per piece | 12% | 18% |
| Dissolving-grade chemical wood pulp | 12% | 18% |
| Most paper & paperboard (other than exercise-book paper) | 12% | 18% |
If you sell any of these, you don’t charge GST – but you also can’t claim ITC on inputs related to them, so plan accordingly.
| Exempt Item Type | What’s Included |
|---|---|
| Fresh produce | Fresh and unprocessed vegetables, fruits, nuts (coconut, almond, cashew in shell), ginger, turmeric, tender coconut water (loose), prasadam |
| Dairy & eggs | Fresh milk (pasteurised, UHT), curd, lassi, buttermilk (loose), paneer/chena, fresh eggs, loose honey |
| Grains & staples | Loose rice, wheat, millets, maize, oats, barley, sorghum, atta, besan; loose puffed/beaten rice, pappad, bread, roti, chapati, paratha, khakhra |
| Water & natural beverages | Plain non-aerated water, neera (date/palm) |
| Animal products | Live animals, fresh/chilled meat, fresh fish, fish & shrimp seeds, frozen semen, animal bones (untreated), human hair (raw) |
| Animal feed & plant materials | Aquatic, poultry, cattle feed; husks; dicalcium phosphate (feed grade); medicinal plants; fresh hop cones; coconut shell; lac; shellac |
| Textiles & fibre | Silkworm cocoons, raw silk, silk waste, khadi fabric (KVIC), wool, raw animal hair, jute fibres, coir fibre/pith (unbranded), cotton waste, Gandhi Topi, khadi yarn |
| Personal care (traditional) | Kajal, kumkum, bindi, sindur, alta |
| Handcrafted items | Earthen pots, clay lamps & idols, glass bangles, hand tools (agricultural), pencil sharpeners, brooms (sarkanda), pencils, crayons, chalks, slate pencils, indigenous handmade musical instruments, sal/sisal leaves |
| Stationery & printed material | Printed/Braille books, newspapers, maps, globes, children’s picture books, printed music, postal items, exercise books, notebooks, pencils, rupee notes, judicial stamps |
| Healthcare | Drugs in Annexure I list (33 life-saving drugs), blood & components, contraceptives, condoms, hearing aids & parts, sanitary napkins/tampons |
| Insurance | Individual health insurance, individual life insurance |
| Religious / cultural | Indian national flag, salt (table, sea-water, sodium chloride), puja samagri (rudraksha, sacred thread, panchamrit, vibhuti, roli, kalava), rakhi (non-precious), deities (stone, marble, wood) |
| Miscellaneous | Electrical energy, uranium ore concentrate, government-to-government grant goods, spacecraft & satellites, firewood, charcoal, plastic/lac/shellac bangles, erasers, passenger baggage, municipal/clinical waste |
The 5% slab is the new workhorse rate – covering everyday essentials and key business inputs.
| Goods Classification | What’s Included |
|---|---|
| Processed foods | Dried herbs, jaribooti, dried fruits, raisins, roasted coffee, processed tea, spices (pepper, cardamom, cinnamon, cloves, saffron, vanilla), preserved fruits & vegetables, jams, jellies, marmalades, sauces, soups, ice cream, sweetmeats, pre-packaged namkeen/bhujia, batters, chutney powder, diabetic foods |
| Dairy & fats | Condensed milk, sweetened yoghurt, whey, butter, ghee, dairy spreads, cheese (other than paneer), packaged honey, animal fats, wool grease, lanolin |
| Edible oils | Soyabean, groundnut, olive, palm, sunflower, coconut, mustard/rape, jojoba; hydrogenated and modified oils; margarine; edible blends; vegetable waxes |
| Pre-packaged meat & fish | Pre-packaged meat & fish products, sausages, preserved meats, caviar, prepared crustaceans & molluscs |
| Sugar & confectionery | Cane/beet sugar, refined sugar, jaggery, packaged khandsari, rab, mishri, gajak, molasses, sugar syrups, boiled candies, cocoa, chocolate |
| Cereal products | Pre-packaged millet flour (≥70%), bread/pastry mixes, doughs, seviyyan, pasta, noodles, sabudana, corn flakes, cakes, biscuits, rusks, packaged cereals |
| Beverages | Mineral water (unsweetened), plant-based milk drinks, soya milk, fruit juices/pulp drinks (non-carbonated), milk-based beverages, ethyl alcohol for OMC blending |
| Apparel & footwear (≤₹2,500) | Knitted/non-knitted apparel ≤₹2,500/piece, made-up textile sets ≤₹2,500, footwear ≤₹2,500/pair, caps, hats, umbrellas, walking sticks |
| Textiles | Silk, wool, cotton, plant-fibre, manmade yarns and fabrics; carpets, rugs, embroidery, lace, zari, technical textiles |
| Metal household items | Metal boxes, utensils, milk cans, nails, sewing needles, kerosene stoves, solar cookers, household items in iron/steel/copper/aluminium/brass, bidriware |
| Stone & ceramic items | Sand-lime bricks, stone inlay craft, stone statues/vases; ceramic and porcelain pots, jars, tableware, kitchenware |
| Minerals (raw) | Iron pyrites, sulphur, graphite, quartz, clays, phosphates, gypsum, mica, talc, feldspar, ores, slag, fly ash |
| Renewable energy & fuel | Bio-gas, coke & semi-coke, PDS kerosene, bunker fuel, LPG (domestic), hydrogen and fuel-cell vehicles, EV chargers, biofuels |
| Pharma & medical | Insulin, drugs & vaccines, ORS, diagnostic kits, glucometers, thermometers, corrective spectacles, dressings, sutures, stents, dialysis units, X-ray machines, surgical instruments, prosthetic aids, Ayurvedic & Unani medicines |
| Agricultural equipment | Tractors, tractor tyres & parts, pumps, sprinklers, drip irrigation, harvesting tools, beekeeping & poultry gear, biogas plants, photovoltaic cells, solar/wind energy units |
| Transport | Aircraft, helicopters, spacecraft, ships, bicycles, tricycles, tractors, trailers, non-motorised vehicles |
| Furniture | Bamboo, cane, rattan furniture; coir products; quilts ≤₹2,500; lanterns, lamps |
| Toys & sports | Toy balloons, tricycles, scooters, pedal cars, chess, carrom, ludo, board games, sports goods, fishing tackle |
| Art & antiques | Paintings, mosaics, original prints, sculptures, stamps, antiques (>100 years) |
| Personal care | Hair oil, shampoo, toothpaste, toilet soap, shaving cream, toothbrushes, talcum, face powder |
| Bio inputs | Bio-pesticides (Bacillus, Trichoderma, neem-based), silicon wafers, biodiesel, fertilisers, agarbatti, natural glues |
| Wood & paper | Particle boards, bamboo flooring, barrels, baskets, wooden idols, cork, pulp, newsprint, cartons, kites, brochures |
| Tobacco (raw) | Tobacco leaves |
| Religious items | Rosaries, prayer beads, hawan samagri, biofuel pellets |
This is the standard rate – anything that isn’t an essential, sin good, or luxury item generally lands here.
| Goods Classification | What’s Included |
|---|---|
| Premium apparel & footwear (>₹2,500) | Apparel/made-ups >₹2,500/piece, waterproof footwear, footwear with rubber/plastic/leather/textile uppers (>₹2,500/pair), flexible bulk containers |
| Headgear & accessories | Hat forms, felt hoods, knitted/crocheted/lace caps, headbands, peaks, chinstraps |
| Hair & wig items | Artificial flowers, prepared wool/animal hair for wigs, wigs, false eyelashes, hair switches |
| Iron & steel basics | Pig iron, ferro-alloys, semi-finished metal products, ingots, scrap, granules, powders |
| Rolled metal products | Flat-rolled iron/steel, bars, rods, wires of stainless steel/copper/aluminium |
| Pipes & fittings | Tubes, pipes, hollow profiles, couplings, elbows, sleeves of base metals |
| Structural items | Sheet piling, track materials, bridges, towers, frameworks, large tanks, gas cylinders |
| Wires & cables | Stranded wire, ropes, plaited bands, barbed wire, fencing, expanded metal |
| Fasteners | Chains, nails, screws, bolts, nuts, rivets, washers, springs, anchors |
| Hand tools & cutlery | Saws, files, pliers, wrenches, anvils, dies, knives, blades, scissors, razors, hair clippers, manicure sets, spoons, forks |
| Household appliances | Air conditioners, televisions >32″ (LED/LCD), monitors, projectors, dishwashers, stoves, cookers, barbecues, radiators, sanitary ware (cast iron) |
| Hardware & fittings | Locks, padlocks, keys, hinges, door closers, safes, filing cabinets, name plates, electrodes |
| Paints & dyes | Dyes, pigments, paints, varnishes, printing inks, writing inks, pesticides (non-bio), thinners, lubricants, fragrances, biodiesel (non-OMC) |
| Cosmetics & detergents | Perfumes, deodorants, beauty creams, skincare products, detergents, polishes, dental wax (other than basic toilet soap & oral care now at 5%) |
| Casein & enzymes | Casein, protein derivatives, glues, enzymes, peptones, culture media, albumins, whey proteins for industrial use |
| Industrial ceramics | Refractory bricks, nozzles, crucibles, lab ware (siliceous, alumina-based) |
| Building ceramics | Tiles, chimney pots, conduits, paving blocks, hearth and wall coverings |
| Sanitary ceramics | Sinks, basins, baths, urinals, bidets |
| Stone & aggregates | Building stones, decorative stones, mosaic cubes, slates, millstones, abrasives |
| Insulation & composites | Rock wool, expanded clays, asphalt/bitumen, plaster panels, fibre-cement boards |
| Cement & concrete | Cement and concrete articles, asbestos-cement goods, friction materials |
| Electrical machines | Motors, generators, transformers, electromagnets, batteries (primary & storage) |
| Industrial appliances | Vacuum cleaners, heaters, ignitions, lighting, welding machines, ovens |
| Audio/visual | Cameras, recorders, microphones, speakers, transmitters, radars, CCTV, alarms |
| Electronics & semiconductors | Switches, fuses, lamps, semiconductors, integrated circuits, LEDs, wires, insulators, e-waste |
| Explosives | Propellant powders, detonators, fireworks, pyrotechnics, lighter fuels |
| Spirits & vinegar | Artificial honey, ethyl alcohol (non-OMC), industrial spirits, vinegar |
| Petroleum products | Coal, lignite, petroleum oils, tar, gasoline, propane, butane, waxes, bitumen |
| Chemicals | Most inorganic and organic chemicals (other than gibberellic acid and natural menthol) |
| Glass | Sheets, rods, tubes, safety glass, mosaics, bottles, jars, lamp bulbs, mirrors, optical glass, lenses, watch glass, decorative & lab glassware |
| Furniture | Residential, medical, industrial furniture; bedding; lighting fixtures; prefab buildings |
| Electronic toys | Consoles, gaming machines, fairground equipment, exercise equipment |
| Stationery | Pens, brushes, mops, markers, stamps, ink pads, office sets |
| Industrial machinery | Engines, turbines, reactors, boilers, pumps, compressors, refrigeration, conveyors, CNC tools, vending machines, data-processing machines, bearings, gears, gaskets |
| Leather goods | Travel bags, wallets, purses, holsters, leather clothing, gloves, belts |
| Furs | Raw, tanned, dressed furs; fur apparel; artificial fur |
| Mineral ores | Ores of iron, manganese, copper, aluminium, zinc, lead; cement, slags, dross |
| Plastics | Polymers, resins, plastic pipes, fittings, packaging, kitchenware, woven bags |
| Rubber | Synthetic rubber, vulcanized rubber, conveyor belts, tyres (other than agricultural), tubes, retreads, gloves, hygienic containers |
| Watches & clocks | All watches, clocks, time recorders, timers, movements, cases, bands, straps |
| Musical instruments | String, wind, percussion, electric instruments; music boxes; accessories |
| Weapons | Firearms (other than 40%-rated handguns), explosives, swords, grenades, missiles |
| Optical & precision | Binoculars, microscopes, telescopes, lasers, gauges, thermometers, analyzers, lab equipment |
| Tobacco-related | Cigarette filter rods |
| Nicotine cessation | Nicotine patches, oral & transdermal cessation products |
| Rail transport | Locomotives, coaches, wagons, signalling gear, refrigerated containers |
| Road vehicles | Buses, larger goods carriers, SPVs, vehicle parts, chassis |
| Aircraft & boats | Aircraft, parachutes, vessels, canoes, boats |
| Wood & paper | Plywood, fibre boards, joinery, flooring, framing, pulp, paper (most grades), kraft, tissue, coated, carbon, cigarette paper, wallpaper, stationery, printed promotional materials |
| Services | IT services, telecom, banking, financial services, restaurants (specified categories), professional services, courier and postal services, multimodal & non-Indian-Railways container transport, manufacturing job work (most categories) |
The new 40% slab is small and specific – it’s for items the government wants to discourage or tax for redistribution.
| Goods Classification | What’s Included |
|---|---|
| High-sugar & carbonated drinks | Sweetened/aerated waters, flavoured non-alcoholic drinks, caffeinated beverages, carbonated fruit-juice drinks |
| Gambling & gaming | Betting, casinos, horse racing, lotteries, online money gaming (actionable claims), admission to IPL and similar sporting events |
| Handguns | Revolvers and pistols |
| High-engine vehicles | Motorcycles >350 cc; passenger cars excluding small-car limits; petrol/petrol-hybrid cars >1200 cc or >4000 mm length; diesel/diesel-hybrid cars >1500 cc or >4000 mm length |
| Aircraft & yachts | Aircraft for personal use, yachts, pleasure vessels |
Tobacco products and pan masala will move to 40% on a date to be notified after compensation cess loans are repaid. Until then, they continue at 28% (plus existing cess).
Not everything fits the 5-18-40 buckets. A few specialised categories continue at their own rates:
| Goods Classification | Item | Rate |
|---|---|---|
| Pan Masala (residual) | Pan masala | 28% |
| Tobacco products | Unmanufactured tobacco, tobacco refuse, cigars, cheroots, cigarillos, cigarettes, manufactured tobacco, biris, tobacco-substitute inhalation products | 28% |
| Precious metals | Pearls (natural/cultured, unstrung); silver and silver-plated forms; gold and gold-plated forms; platinum; precious metal scrap; precious-metal-clad base metals | 3% |
| Jewellery | Gold, silver, platinum jewellery and parts; goldsmith/silversmith wares; pearl articles; imitation jewellery; coins | 3% |
| Diamonds & gemstones | Rough or sawn diamonds; precious stones (non-diamond); semi-precious unstrung stones; synthetic/reconstructed stones (unstrung); synthetic diamonds | 0.25% |
| Diamond job work | Job work on diamonds | 1.5% |
| Bricks/Tiles | Fly-ash bricks, building bricks, fossil bricks, earthen/roofing tiles | 12% (Notification 14/2025-CTR) |
If you want to see the full impact of GST 2.0 in one place, this is the table to bookmark.
| Item / Category | Old GST | New GST | Impact |
|---|---|---|---|
| Hair oil, shampoo, toothpaste | 18% | 5% | Cheaper |
| Butter, ghee, paneer, cheese | 12% | 5% | Cheaper |
| Pre-packaged namkeen, bhujia | 12% | 5% | Cheaper |
| Sewing machines & parts | 12% | 5% | Cheaper |
| Tractors | 12% | 5% | Cheaper |
| Tractor tyres & parts | 18% | 5% | Cheaper |
| Drip irrigation, sprinklers | 12% | 5% | Cheaper |
| Bio-pesticides, micronutrients | 12% | 5% | Cheaper |
| Individual health & life insurance | 18% | Nil | Much cheaper |
| 33 life-saving drugs | 12% | Nil | Much cheaper |
| Thermometer | 18% | 5% | Cheaper |
| Glucometer & test strips | 12% | 5% | Cheaper |
| Corrective spectacles | 12% | 5% | Cheaper |
| Diagnostic kits & reagents | 12% | 5% | Cheaper |
| Air conditioners | 28% | 18% | Cheaper |
| TVs above 32″ (LED/LCD) | 28% | 18% | Cheaper |
| Monitors & projectors | 28% | 18% | Cheaper |
| Dishwashers | 28% | 18% | Cheaper |
| Small petrol cars (≤1200 cc, ≤4000 mm) | 28% (+ cess) | 18% | Much cheaper |
| Small diesel cars (≤1500 cc, ≤4000 mm) | 28% (+ cess) | 18% | Much cheaper |
| Three-wheelers | 28% | 18% | Cheaper |
| Motorcycles ≤350 cc | 28% | 18% | Cheaper |
| Goods transport vehicles | 28% | 18% | Cheaper |
| Cement | 28% | 18% | Cheaper |
| Notebooks, exercise books | 12% | Nil | Much cheaper |
| Pencils, sharpeners, crayons | 12% | Nil | Much cheaper |
| Maps, charts, globes | 12% | Nil | Much cheaper |
| Erasers | 5% | Nil | Cheaper |
| Apparel ≤₹2,500/piece | 5% / 12% | 5% | Same / Cheaper |
| Apparel >₹2,500/piece | 12% | 18% | Costlier |
| Footwear ≤₹2,500/pair | Various | 5% | Simplified |
| Footwear >₹2,500/pair | 18% | 18% | Same |
| Coal, lignite, peat | 5% | 18% | Costlier |
| Aerated/carbonated beverages | 28% | 40% | Costlier |
| Caffeinated beverages | 28% | 40% | Costlier |
| Other non-alcoholic beverages | 18% | 40% | Much costlier |
| Large cars (above small-car limits) | 28% (+ cess) | 40% | Similar / Costlier |
| Motorcycles >350 cc | 28% | 40% | Costlier |
| Yachts, personal aircraft | 28% | 40% | Costlier |
| Revolvers & pistols | 28% | 40% | Costlier |
| Casinos, IPL admission, online gaming | 28% (+ ITC) | 40% (+ ITC) | Costlier |
| Smoking pipes, cigar holders | 28% | 40% | Costlier |
| Pan masala | 28% | 40%* | Deferred |
| Tobacco products | 28% (+ cess) | 40%* | Deferred |
| Gold, silver, platinum jewellery | 3% | 3% | No change |
| Rough diamonds, uncut gemstones | 0.25% | 0.25% | No change |
| Mobile phones | 18% | 18% | No change |
| Restaurant services (most) | 5% | 5% | No change |
| EVs (Electric Vehicles) | 5% | 5% | No change |
*Tobacco and pan masala continue at 28% until compensation cess loans are repaid; the move to 40% will be notified separately.
The good news is widespread. Daily-use FMCG items – soap, shampoo, toothpaste, butter, ghee, packaged namkeen – are noticeably cheaper now. Insurance premiums dropped 18% for individual policies. Big-ticket buys like air conditioners, large TVs, dishwashers, small cars, and motorcycles are 10 percentage points cheaper. Healthcare costs fell across the board: 33 life-saving drugs at nil GST, plus thermometers, glucometers, and diagnostic kits dropping from 12–18% down to 5%. Back-to-school shopping is lighter on the wallet too – notebooks, pencils, crayons, and maps are all at 0% now.
The bad news is narrower but real. Aerated drinks, energy drinks, big cars, premium motorcycles, casinos, and online gaming all moved to 40%.
The transition isn’t optional – every invoice from 22 September 2025 onwards must reflect the new rates. That means catalogues, MRPs, and ERP/billing systems all need updating.
A few practical things to keep in mind:
Here’s a 7-step checklist to get through the transition cleanly:
Vyapar App is built for Indian SMBs navigating exactly this kind of change. With GST 2.0 live, here’s what Vyapar does for you out of the box:
Whether you sell daily essentials at 5%, standard goods at 18%, or premium items at 40%, every invoice comes out right – without you memorizing the rate book.
22 September 2025. Tobacco and pan masala move to 40% on a separately notified date once compensation cess loans are repaid.
They follow the old rates. From 22 September onwards, all new invoices use the new rates. For transitional cases (advance received earlier, supply made later, etc.), apply the time-of-supply rule under Section 14 of the CGST Act.
Four main rates: 0%, 5%, 18%, 40%. Plus niche rates: 3% (gold/jewellery), 0.25% (rough diamonds & gemstones), 1.5% (diamond job work), 12% (specified bricks and tiles), and 28% (residual for tobacco/pan masala until separately notified).
Yes. Gold jewellery, biscuits, and semi-manufactured gold (HSN Chapter 71) continue at 3% (1.5% CGST + 1.5% SGST, or 3% IGST).
18% under HSN 8517. No change.
Cement now attracts 18% (down from 28%). Big relief for the construction sector.
Individual health insurance and individual life insurance policies are now exempt (Nil) from GST. Group insurance and reinsurance have specific treatment under Notification 16/2025-CTR.
Rooms with tariff up to ₹7,500 per night per unit are typically at the lower slab (around 5%); rooms above ₹7,500 attract 18%. Always check the latest service-rate notification for your specific category.
Yes. Plain mineral water (unsweetened) is at 5%. Sweetened/aerated/carbonated drinks now attract 40% under the sin-goods slab.
Big yes. Tractors moved from 12% to 5%, tractor tyres & parts from 18% to 5%, drip irrigation, sprinklers, and farm machinery to 5%. A clear win for the agricultural sector.
Most restaurant services remain at 5% (without ITC). Specific categories (AC restaurants in certain hotel classes) may have different rates. Refer to Notification 11/2017-CTR (as amended) for your exact category.
Three ways: (a) Look up the HSN/SAC code on gst.gov.in, (b) Use the Vyapar GST Calculator and HSN-code finder built into the app, (c) Refer to the chapter-wise table above.
Yes. GST is uniform across India. CGST + SGST applies to intra-state sales; IGST applies to inter-state and imports. The total rate is identical regardless of state.
Composition rates are unchanged: 1% for traders/manufacturers, 5% for restaurants, 6% for specified service providers – all on turnover.
40% – applied to sin and luxury goods like aerated drinks, large luxury cars, motorcycles above 350 cc, yachts, casinos, and online money gaming.
Yes. TCS under GST is now 0.5% (reduced from 1% w.e.f. 9 July 2024). TDS continues at 2%.
Under amended Rule 91(2), provisional refunds in Form GST RFD-04 are sanctioned within 7 days based on risk parameters (effective 1 October 2025). Aadhaar-authenticated taxpayers and certain sectors are excluded.
All 56th Council notifications (09/2025-CTR to 17/2025-CTR) are on the CBIC website at cbic.gov.in and the official PIB press release at pib.gov.in.
Written by
Megha Agarwal, CA, is the founder of a Megha & Associates with over 5 years of expertise in accounting, taxation, and business advisory. She specializes in streamlining financial processes and ensuring regulatory compliance to drive sustainable growth for businesses and professionals through practical solutions. Designation: Chartered Accountant, FCA Membership Number (MRN): 455035 City: Raipur, C.G
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