Last Updated: June 5, 2026 | Reviewed by: Parul Singh (GST Practitioner, 15+ years experience)
5%
Essential & Most Goods
Food, FMCG, EVs, Medicine
18%
Standard Rate
Services, Electronics, IT
40%
Ultra Luxury & Sin
Luxury Cars, Tobacco, Yachts
3%
Gold & Silver
Jewellery, Coins, Bars
0%
Exempted
Milk, Eggs, Vegetables
⚡ GST 2.0 Key Changes (September 2025):
- 12% slab MERGED into 5% — mobile phones, processed food, computers now at 5%
- 28% slab MERGED into 18% — ACs, cars, appliances now at 18%
- 40% ultra luxury slab — super luxury cars (₹50L+), yachts, private jets, premium spirits
- ~375 goods & services got cheaper — estimated ₹2 lakh crore savings for consumers
- Gold remains at 3%, restaurants at 5%, insurance at 18%
Source: 56th GST Council Meeting, CBIC Notifications, gst.gov.in
Table of Contents:
GST Rate Structure Overview
The GST Council has categorized goods and services into different tax slabs: 5%, 18%, and 40% (GST 2.0 — effective September 2025) ultra luxury slab introduced in the GST 2.0 reforms of 2025. Here's a detailed breakdown of each slab:
| GST Slab (GST 2.0) | CGST | SGST | IGST | Applicable On |
|---|---|---|---|---|
| 0% | 0% | 0% | 0% | Essential items: milk, eggs, vegetables, salt, fresh produce |
| 5% | 2.5% | 2.5% | 5% | Most goods: packaged food, medicine, mobile phones, computers, FMCG, EVs |
| 18% | 9% | 9% | 18% | Standard: electronics, cars, ACs, services, restaurants (AC), banking, insurance |
| 40% 🆕 | 20% | 20% | 40% | Ultra luxury: super cars ₹50L+, yachts, private jets, premium spirits, sin goods |
| 3% | 1.5% | 1.5% | 3% | Gold, silver, platinum jewellery, coins, bars |
| 0.25% | 0.125% | 0.125% | 0.25% | Rough diamonds, precious stones |
GST Rates for Goods (Commodity-wise)
0% GST Goods (Exempted)
- Fresh milk, curd, buttermilk
- Fresh fruits and vegetables
- Eggs (not processed)
- Salt (all types)
- Bindi, sindoor, kumkum
- Human hair (unworked)
- Religious books (Bhagavad Gita, Bible, Quran, Guru Granth Sahib)
5% GST Goods (Expanded under GST 2.0 — includes old 12% items)
- Sugar, tea, coffee, spices, packaged food
- Mobile phones, computers, laptops (reduced from 18% → GST 2.0)
- Medicine, ayurvedic products, health supplements
- Coal, lignite, fertilizers, renewable energy equipment
- Electric vehicles (EVs), EV charging stations
- Footwear below ₹1,000, readymade garments
- Butter, ghee, cashew nuts, raisins, frozen fish
- Handicraft items, agarbatti, coir products
18% GST Goods (Now includes old 28% items under GST 2.0)
- Air conditioners, refrigerators, washing machines (reduced from 28% → GST 2.0)
- Cars, motorcycles, SUVs (reduced from 28% → GST 2.0)
- Soaps, shampoos, toothpaste, hair oil, cosmetics
- LED TVs, monitors, printers, cameras, speakers
- Biscuits, pasta, noodles, instant food mixes
- Paint, varnish, cement, construction materials
- Tobacco products, aerated beverages (without cess)
40% GST Goods (New - GST 2.0) 🆕
- Ultra luxury cars (above ₹50 lakhs)
- Luxury watches (above ₹1 lakh)
- Designer handbags and accessories
- Premium spirits and liquor
- High-end yachts and private jets
GST Rates for Services
| Service Category | GST Rate | Notes |
|---|---|---|
| Hotel stay (room rent < ₹1,000) | 0% | Exempted |
| Hotel stay (₹1,000 - ₹2,500) | 12% | - |
| Hotel stay (₹2,500 - ₹7,500) | 18% | - |
| Hotel stay (> ₹7,500) | 28% | - |
| Restaurant services (non-AC) | 5% | No ITC |
| Restaurant services (AC) | 18% | With ITC |
| Telecom services | 18% | - |
| Banking & financial services | 18% | - |
| Insurance services | 18% | - |
| Air travel (economy) | 5% | - |
| Air travel (business) | 12% | - |
| Rail travel (sleeper) | 5% | - |
| Rail travel (AC) | 12% | - |
GST 2.0 - New Rates and Changes (2025-2026)
🆕 Major GST 2.0 Rate Changes:
- New 40% ultra luxury slab introduced for premium goods
- Mobile phones reduced from 18% to 12% to promote digital India
- Electric vehicles remain at 5% to encourage green mobility
- Restaurant services (non-AC) reduced from 12% to 5% to support small businesses
- Renewable energy equipment reduced to 5%
Exempted Goods and Services (0% GST)
The following goods and services are exempt from GST (0% tax rate):
- Fresh milk, curd, buttermilk
- Fresh fruits and vegetables
- Eggs (not processed)
- Salt (all types)
- Bread (not pizza bread or bread with filling)
- Prashad/offering at religious places
- Services by RBI, SEBI, IRDA
- Health services (hospitals, clinics)
- Educational services (schools, colleges)
Compensation Cess on Luxury Goods
In addition to GST, certain luxury and sin goods attract a Compensation Cess:
- Pan masala: 60% cess
- Tobacco products: 36% to 290% cess
- Aerated beverages: 12% cess
- Coal: ₹400 per tonne
- Luxury cars (above ₹50 lakhs): 22% cess (new)
Frequently Asked Questions about GST Rates
❓ What is the current GST rate in India 2026?
GST rates in India 2026 are 5%, 18%, and 40% (GST 2.0 — effective September 2025) ultra luxury slab introduced in GST 2.0 reforms.
GST rates in India 2026 are 5%, 18%, and 40% (GST 2.0 — effective September 2025) ultra luxury slab introduced in GST 2.0 reforms.
❓ What is the GST rate for AC restaurants?
AC restaurants charge 18% GST, while non-AC restaurants charge 5% GST.
AC restaurants charge 18% GST, while non-AC restaurants charge 5% GST.
❓ What is the GST rate for mobile phones in 2026?
Mobile phones have been reduced from 18% to 12% under GST 2.0 reforms.
Mobile phones have been reduced from 18% to 12% under GST 2.0 reforms.
❓ Is there GST on healthcare services?
No, healthcare services provided by hospitals and clinics are exempt from GST (0%).
No, healthcare services provided by hospitals and clinics are exempt from GST (0%).
Advertisement