New GST Rates List in India 2025

Latest GST Rates List for 2025

New List of Items Under the 0% GST Slab Rate

New List of Items Under the 5% GST Slab Rate

New List of Items Under the 12% GST Slab Rate

New List of Items Under the 18% GST Slab Rate

New List of Items Under the 28% GST Slab Rate

Source: https://cbic-gst.gov.in/gst-goods-services-rates.html

Types of GST Rates and GST Rate Structure in India

India's Goods and Services Tax (GST) system follows a multi-tiered rate structure, with different tax rates for various goods and services. The primary GST slabs applicable to most regular taxpayers are as follows:

1. 0% (Nil-rated) – No GST is levied on certain goods and services, which are deemed essential or basic, such as food grains, healthcare services, and educational services.

1. 5% – This rate applies to items that are considered essential but not necessarily basic, such as certain food products, footwear, and certain services.

1. 12% – This rate applies to goods and services that are not classified under the lower tax slabs. For example, processed food and other non-essential goods may fall under this category.

1. 18%? – This is one of the most common GST slabs and applies to a wide range of goods and services, such as electronic items, household goods, and some professional services.

1. 28% – This highest tax rate applies to luxury and non-essential goods like high-end vehicles, expensive consumer goods, and services like casinos, gambling, and certain entertainment services.

Other GST Rates and Features

1. 3% GST – Applicable to specific items like coconut oil, Gold and some other niche goods.

1. 0.25% GST – This very low rate is applied to precious stones such as diamonds.

Composition Scheme for Small Businesses

For small businesses with a turnover below the prescribed limit, there is the Composition Scheme, under which the GST rates are simplified to lower rates:

1. 1% GST for manufacturers and traders

1. 5% GST for restaurants and food service providers

1. 6% GST for service providers (under some conditions)

This scheme allows businesses to pay a lower rate of tax on their turnover and reduces the compliance burden, though they are not eligible to claim input tax credits (ITC).

TDS and TCS Under GST

1. TDS (Tax Deducted at Source): The TDS rate under GST is 2% on payments made to suppliers by certain specified persons.

1. TCS (Tax Collected at Source): The TCS rate is 0.5% for e-commerce operators collecting tax on behalf of suppliers.

Note: Prior to 9th July 2024, the TDS rate was 1% and the TCS rate was 1% as well.

GST Cess

In addition to the regular GST rates, Cess is levied on certain high-end products to compensate for the potential loss of revenue from the introduction of GST. The cess rates vary and apply to specific products like:

1. Cigarettes – Cess rates can be as high as 204%

1. Tobacco – Similar high cess rates apply

1. Aerated water, motor vehicles, and petrol are also subject to varying cess rates, ranging from 1% to 22% or more, depending on the item.

New List of Items Under the 3% GST Slab Rate

New List of Items Under the 0.25% GST Slab Rate

Importance of Goods and Services Tax (GST) Rates in India

In India, the Goods and Services Tax (GST) replaces a range of indirect taxes with a single, unified tax rate that applies across the entire country. GST fosters a more uniform tax structure across India, benefiting traders and service providers. The Indian government has made the GST system easily accessible through an online portal, enabling smooth registration and login for users.

The key advantages of this uniform GST rate include:

1. Eliminating Tax-on-Tax: GST helps eliminate the risk of a tax-on-tax structure, which reduces the overall cost of products and services.

1. Simplified Compliance: With most indirect taxes subsumed under one system, compliance becomes much simpler for businesses.

1. Boosting the Economy: GST enables higher tax collection, thereby contributing to the strengthening of the nation's economy.

1. Reducing Tax Fraud and Corruption: By ensuring greater transparency, GST helps in reducing the risks of tax fraud and corruption.

1. Encouraging Compliance: The system encourages unorganised and small businesses to comply with tax regulations set by the Indian government.

HSN and SAC System in GST Tax Classification

The Harmonised System of Nomenclature (HSN) and Service Accounting Code (SAC) are two coding systems used to classify goods and services for taxation purposes under the GST regime.

Detailed Classification of the HSN System in GST:

1. The HSN system, established by the WCO (World Customs Organisation) and adopted by India in 1986, is a globally recognised method for naming and numbering traded goods for taxation and trade purposes.

1. It consists of 21 sections, 99 chapters, 1244 headings, and 5224 subheadings, each identified by a six-digit code, with the possibility of two additional digits for domestic use.
2. The structure of the HSN code includes:

1. First two digits: Chapter number
2. Next two digits: Heading number
3. Next two digits: Subheading number
4. Last two digits: Further subheading number

1. The HSN system aids in consistent classification of goods across regions, easy identification and description of goods, prevention of disputes and lawsuits, simplification of customs processes and documents, and collection and analysis of trade data.
2. For instance, the HSN code for rice is 1006, indicating its classification in section 2 (vegetables), chapter 10 (cereals), heading 06 (rice), and no further subheading. It also denotes the applicable tax rate, which is 5% under GST.
3. Incorrect usage of HSN codes can result in erroneous tax calculations, delayed or denied tax credits, penalties or interest for non-compliance, difficulties in filing returns and matching invoices, and potential seizure of goods at customs.

Detailed Classification of the SAC System in GST:

1. The SAC system is a code-based classification of services under GST issued by the Central Board of Excise and Customs (CBEC) department, derived from the United Nations Central Product Classification (CPC).
2. It comprises 99 sections, each identified by a two-digit code.
3. The structure of the SAC code includes:

1. The first two digits: Section number
2. The next two digits: Chapter number
3. The subsequent two digits: Heading number
4. The final two digits: Subheading number

1. The SAC system aims 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 based on the service category and location.
2. Service providers and tax authorities should utilise correct and updated SAC codes to mitigate errors and mismatches.