Quick Read
- The rate structure of the new GST shall become effective starting from 22nd September 2025 for some specific items.
- The revised GST structure can affect the final cost of goods and services, making accurate rate identification important for businesses.
- The special GST rates of gold, silver, uncut diamonds, and some precious stones do not undergo any change.
- The correct GST classification is important for applying the applicable rate to goods and services.
For a business, GST is not only a transaction tax. It may affect their pricing and customers’ expectations and how a company manages its finances. By keeping themselves abreast of changes to the GST, businesses can become more knowledgeable and informed.
What are the Latest GST Rates in India?
The new GST rate in India has been structured around major tax slabs, with specific rates assigned to several goods and services. The rate applicable to a good or service depends on its categorisation as per the recent GST notifications.
| GST Rate | Broad category |
| 0% | Exempt supplies |
| 5% | Merit-rate supplies |
| 18% | Standard-rate supplies |
| 40% | Specified luxury and demerit goods and services |
| 3% | Certain precious metal supplies |
| 0.25% | Certain rough diamonds and precious stones |
*This is an illustrative list of GST rates and not an exhaustive list of goods and services. The rates are subject to the applicable HSN/SAC categories.*
What is Covered Under the 5% GST Slab?
The 5% GST slab applies to many goods and some services that are used by ordinary citizens on a daily basis. Some of these are personal care products, medicines, agricultural machinery, and passenger transport services. The rate of GST is decided by the nature of the good/service and the conditions mentioned in the rules.
Some examples of goods and services under this category are toilet soap bars, toothpaste, bicycles, certain medicines and agricultural equipment, and specific services like passenger transportation and beauty/beautician services.
What Comes Under the 18% GST Rate?
The 18% GST slab applies to a wide range of goods and services and remains a key GST rate in India. A number of consumer durables and certain vehicles come under this category of goods.
The following are some of the products that fall under 18% tax: air conditioners, dishwashers, television sets, monitors, cars, 3-wheelers, buses, and goods transport vehicles. Motorcycles up to 350 cc are also covered under this rate.
Which Goods and Services Attract 40% GST?
The 40% GST rate is applicable to specified luxury and demerit goods and services, including certain cars, utility vehicles and motorcycles above 350 cc. It also includes specified actionable claims such as betting, casinos, gambling, horse racing, lottery and online money gaming.
The rate does not automatically apply to every luxury or tobacco product. Certain tobacco and pan masala products have separate provisions, and therefore reference should be made to the latest GST notification for the applicable rate.
What are the Special GST Rates?
Some specific goods are assigned tax rates outside the standard GST slabs based on their category:
- 3% GST: Gold, silver, and specific precious metal supplies
- 0.25% GST: Certain rough diamonds and specified precious stones
*The precise rate is determined by the relevant GST category and notification.*
How Has the New GST Slab Structure Affected Businesses?
Changes in GST rates can affect how businesses price their goods and manage billing processes.
A variation in rates will mean businesses have to adjust their accounting systems. Businesses are supposed to verify the right HSN code or SAC code, depending on the applicable GST amendment.
Conclusion
India’s GST rates 2026 will consist of numerous slabs and special rates. It will be essential for people to categorise the products or services into the correct slabs to ensure accurate tax calculations. Keeping themselves updated with the new GST rate list by updating their invoices and prices could help businesses manage their finances effectively.
We understand that fluctuations in tax rates and business costs may impact working capital needs, and at Lendingkart, we offer collateral-free business loans of up to ₹50 lakh to eligible businesses, which can be used to support working capital, inventory, operational expenses, and other eligible business purposes that may arise, subject to eligibility and assessment criteria.
Frequently Asked Questions (FAQs)
1. What are the GST slabs applicable in India in 2026?
The basic GST rates are 5%, 18%, and 40%, which apply to specific goods/services. Some supplies are exempt from GST, while others attract 5% GST.
2. When were the revised GST rates introduced in India?
Except for some tobacco products, all other revised rates were effective as of 22nd September 2025. In the case of tobacco products, there was a different schedule of implementation.
3. What is the standard GST rate in India?
It should be noted that, according to the new rates, the standard rate of GST is 18%, though it varies according to goods/services.
4. Are all essential goods exempt from GST?
Not necessarily. Some essential supplies are exempt from GST, while others attract 5% GST.
5. Where can I check the latest GST rate?
Businesses can refer to the latest GST Council rate notifications and applicable CBIC notifications for the official rate applicable to a particular supply.
