GST Filing Services in Hyderabad
December 29, 2025
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New GST Rates in India 2025
The new GST rates in India for 2025 mark one of the biggest tax reforms since the introduction of Goods and Services Tax. Announced during the 56th GST Council Meeting, the government has rolled out GST 2.0, a next-generation tax framework aimed at simplifying compliance, improving transparency, and stimulating economic growth.
Effective from September 22, 2025, the revised GST structure reduces multiple tax slabs into three primary GST rates – 5%, 18%, and 40%. These changes impact businesses, consumers, manufacturers, and service providers across all sectors.
This guide explains the new GST rates, revised slabs, key changes, and their implications in a clear, item-wise manner.
Highlights of the New GST Rates (2025)
- The 56th GST Council Meeting introduced GST 2.0, consolidating tax slabs into 5%, 18%, and 40%
- The new GST rates are effective from September 22, 2025
- Essential goods and services such as dairy products, 33 life-saving drugs, and educational materials are now nil-rated
- Individual health and life insurance policies are fully exempt from GST
- Daily-use essentials, agricultural inputs, and medical equipment fall under the 5% GST slab
- Electronics, automobiles, and household appliances are taxed at 18% GST
- Sin goods and luxury items, including pan masala, aerated drinks, and luxury vehicles, attract 40% GST
- All rate revisions (except tobacco products) are applicable from September 22, 2025, along with aligned notifications on exemptions and refunds
What Are the New GST Rates in India?
The new GST rates refer to the revised tax percentages applied to the supply of goods and services under India’s GST law. These rates are levied under:
- CGST (Central GST)
- SGST (State GST)
- IGST (Integrated GST)
Example:
If GST of ₹1,800 is charged on a taxable value of ₹10,000, the applicable GST rate is 18%.
Category | Items | GST Rate From (%) | GST Rate To (%) |
Daily Essentials | Hair Oil, Shampoo, Toothpaste, Toilet Soap Bar, Tooth Brushes, Shaving Cream | 18 | 5 |
Butter, Ghee, Cheese & Dairy Spreads | 12 | 5 | |
Pre-packaged Namkeens, Bhujia & Mixtures | 12 | 5 | |
Utensils | 12 | 5 | |
Feeding Bottles, Baby Napkins & Clinical Diapers | 12 | 5 | |
Sewing Machines & Parts | 12 | 5 | |
Uplifting Farmers & Agriculture | Tractor Tyres & Parts | 18 | 5 |
Tractors | 12 | 5 | |
Specified 12 Bio-pesticides & Micro-nutrients | 12 | 5 | |
Drip Irrigation Systems & Sprinklers | 12 | 5 | |
Agricultural, Horticultural & Forestry Machines | 12 | 5 | |
Healthcare Sector | Individual Health & Life Insurance | 18 | Nil |
Thermometer | 18 | 5 | |
Medical Grade Oxygen | 12 | 5 | |
All Diagnostic Kits & Reagents | 12 | 5 | |
Glucometer & Test Strips | 12 | 5 | |
Corrective Spectacles | 12 | 5 | |
33 Listed Drugs & Medicines (as per press release) | 12 | Nil | |
Agalsidase Beta, Imiglucerase & Eptacog alfa (Recombinant Factor VIIa) | 5 | Nil | |
Faricimab, Pertuzumab, FF/UMEC/VI, Ocrelizumab, Brentuximab Vedotin | 12 | 5 | |
Automobiles | Petrol & Petrol Hybrid, LPG, CNG Cars (≤1200cc & ≤4000mm) | 28 | 18 |
Diesel & Diesel Hybrid Cars (≤1500cc & ≤4000mm) | 28 | 18 | |
Three-wheelers | 28 | 18 | |
Motorcycles (≤350cc) | 28 | 18 | |
Motor Vehicles for Transport of Goods | 28 | 18 | |
Education | Maps, Charts & Globes | 12 | Nil |
Pencils, Sharpeners, Crayons & Pastels | 12 | Nil | |
Exercise Books & Notebooks | 12 | Nil | |
Erasers | 5 | Nil | |
Electronic Appliances | Air Conditioners | 28 | 18 |
Television (Above 32”, incl. LED & LCD) | 28 | 18 | |
Monitors & Projectors | 28 | 18 | |
Dish Washing Machines | 28 | 18 |
GST Rate Hikes
Category | Item description | From (%) | To (%) |
Mining | Coal, lignite, peat | 5 | 18 |
Sin goods | tobacco/ pan masala* | 28 | 40 |
Aerated waters | 28 | 40 | |
Caffeinated beverages | 28 | 40 | |
Carbonated beverages of fruit drinks / with fruit juice | 28 | 40 | |
Other non‑alcoholic beverages | 18 | 40 | |
Motor cars and larger hybrids (beyond small‑car thresholds) | 28 | 40 | |
Motorcycles exceeding 350cc | 28 | 40 | |
Aircraft for personal use | 28 | 40 | |
Yachts and vessels for pleasure/sports | 28 | 40 | |
Smoking pipes and cigarette/cigar holders | 28 | 40 | |
Revolvers & pistols | 28 | 40 | |
Admission to casinos, race clubs, and sporting events like IPL | 28% with ITC | 40% with ITC | |
Licensing of bookmakers by race clubs | 28% with ITC | 40% with ITC | |
Specified actionable claims (betting, casinos, gambling, horse racing, lottery, online money gaming) | 28% with ITC | 40% with ITC | |
Leasing/rental without operator of goods attracting 40% GST | 28% with ITC | 40% with ITC | |
Paper sector | Dissolving‑grade chemical wood pulp | 12 | 18 |
Various papers/paperboards, other than exercise‑book paper | 12 | 18 | |
Textiles | Apparel/Made‑ups > Rs 2,500 per piece | 12 | 18 |
Quilted/cotton quilts and quilted products more than Rs.2,500 per piece | 12 | 18 |
List of Items with 0% GST Rate (Nil-Rated / Exempt)
Category | Items Covered |
Fresh Produce | Fresh vegetables, fruits, nuts, ginger, turmeric, tender coconut water, prasadam |
Processed & Preserved Foods | Frozen/dried vegetables, unroasted coffee beans, unprocessed tea leaves, seed-quality seeds |
Dairy & Eggs | Milk, curd, lassi, buttermilk (non-packaged), paneer, eggs, non-packaged honey |
Grains & Staples | Non-packaged cereals/flours, millet flour (≥70%), puffed rice, bread, roti, chapathi, khakhra |
Water & Beverages | Plain water, neera (date/palm) |
Animal Products | Live animals, fresh/chilled meat & fish, shrimp seeds, animal bones & by-products |
Animal Feed & Plants | Animal feed, oil cakes, bran, medicinal plants, lac, shellac |
Textiles & Fibres | Raw silk, wool, jute fibre, khadi fabric & yarn, coconut coir |
Personal Care | Kajal, kumkum, bindi, sindur, alta |
Handicrafts | Earthen pots, clay lamps, idols, glass bangles, handmade instruments |
Stationery & Print | Books, newspapers, maps, globes, exercise books, judicial stamps |
Healthcare | Specified medicines, blood, contraceptives, hearing aids, sanitary napkins |
Miscellaneous | Indian flag, salt, electricity, puja samagri, firewood, charcoal, deities |
Accounting Impact of a Credit Note
- Seller’s Books: Reduces accounts receivable
- Buyer’s Books: Receives confirmation of credit
Journal Entry (Seller):
Dr. Sales Return A/c
Cr. Customer A/c
Credit Note Under GST (India)
A credit note reduces the seller’s tax liability and must be declared in GSTR-1. Timely reporting is crucial to ensure correct GST returns.
Common Uses of Credit Notes
- B2B sales returns
- Export transactions
- Sales invoice corrections
Debit Note vs Credit Note: Comparison Table
Particulars | Debit Note | Credit Note |
Issued By | Buyer | Seller |
Purpose | Requests return or reduction in payable amount | Confirms return or reduction in receivable amount |
Applicable To | Credit purchases | Credit sales |
Represents | Purchase return | Sales return |
Accounting Impact | Increases buyer’s receivable | Decreases seller’s receivable |
Amount Type | Positive | Negative |
GST Impact | May affect ITC | Reduces tax liability |
Issued In Exchange For | Credit Note | Debit Note |
Traditional Ink Color | Blue | Red |
List of Items Taxed at 5% GST Rate
Category | Description |
Apparel & Clothing (> ₹2,500) | Apparel and accessories (knitted/non-knitted), made-up textile sets above ₹2,500 per piece; flexible bulk containers; all footwear and footwear parts |
Hats & Headgear | Hat forms, hoods, headgear, headbands, linings, peaks, chinstraps |
Hair & Wig Products | Wigs, false hair, eyelashes, eyebrows, artificial flowers and foliage |
Raw & Semi-Finished Metals | Pig iron, ferro-alloys, ingots, metal scrap, granules, powders |
Rolled & Formed Metal Products | Flat-rolled products, bars, rods, angles, wire (iron, steel, aluminium, copper) |
Tubes, Pipes & Fittings | Tubes, pipes, hollow profiles, couplings, elbows, sleeves |
Structural & Large Containers | Bridges, towers, frameworks, tanks (>300L), gas cylinders |
Wires & Cables | Stranded wires, ropes, fencing wire, expanded metal |
Fasteners & Small Metal Parts | Nails, screws, bolts, nuts, rivets, washers, springs |
Hand Tools & Cutlery | Tools, knives, razors, scissors, table cutlery |
Household Appliances & Fixtures | Stoves, heaters, radiators, sanitary ware, cast-iron articles |
Metal Hardware & Fittings | Locks, hinges, safes, furniture fittings, electrodes |
Dyes, Pigments & Paints | Paints, inks, pesticides (non-bio), solvents, biodiesel (non-OMC) |
Personal Care & Beauty | Perfumes, cosmetics, skincare, detergents, polishes |
Pharmaceutical & Protein Products | Casein, enzymes, albumins, whey proteins |
Ceramics – All Types | Refractory, building, sanitary and domestic ceramics |
Stone & Aggregates | Building stone, mosaics, slates, abrasives |
Insulation & Composites | Rock wool, asphalt materials, fibre panels |
Cement & Concrete | Cement articles, asbestos-cement goods, friction materials |
Electrical & Electronic Motors | Motors, generators, transformers, batteries |
Home & Industrial Appliances | Heaters, ovens, furnaces, welding machines |
Audio / Visual Equipment | TVs, cameras, CCTV, speakers, alarms |
Electrical Components | Switches, LEDs, circuits, semiconductors, wiring |
Explosives & Propellants | Explosives, fireworks, detonators |
Fuel & Petroleum Products | Coal, petroleum oils, waxes, bitumen |
Chemicals (Organic & Inorganic) | All chemicals not covered under concessional slabs |
Glass – All Types | Raw, structural, containers, optical, decorative glass |
Furniture & Furnishings | Furniture, bedding, lighting fixtures |
Toys & Games | Electronic toys, gaming equipment, sports goods |
Writing & Office Supplies | Pens, stationery, brushes, cleaning sets |
Machinery (All Types) | Engines, turbines, compressors, textile and CNC machinery |
Leather Goods | Bags, wallets, apparel, gloves, belts |
Rubber & Plastics | Polymers, tyres, tubes, plastic products |
Watches & Instruments | Watches, clocks, measuring instruments |
Weapons & Ammunition | Firearms, swords, missiles, weapon parts |
Vehicles & Transport Equipment | Road vehicles, rail, aircraft, watercraft |
Wood, Pulp & Paper Products | Wood, plywood, paper, cartons, printed material |
List of Items Taxed at 40% GST Rate
Category | Description |
High-Sugar & Carbonated Beverages | Aerated drinks, caffeinated beverages, carbonated fruit drinks |
Betting, Casinos & Gaming | Betting, gambling, lotteries, horse racing, online gaming |
Firearms – Handguns | Revolvers and pistols |
High-Performance Vehicles | Motorcycles >350cc, large cars & hybrids, yachts, pleasure vessels |
List of Items Taxed at Other Niche GST Rates
Category | Description | GST Rate |
|---|---|---|
Pan Masala | Pan masala | 28% |
Tobacco Products | Cigarettes, cigars, biris, chewing tobacco, inhalation products | 28% |
Precious Metals & Gemstones | Gold, silver, platinum, pearls, metal scrap | 3% |
Jewellery & Articles | Jewellery, coins, goldsmith wares | 3% |
Diamonds & Precious Stones | Rough diamonds, synthetic diamonds, precious stones | 0.25% |
Conclusion
The new GST rates under GST 2.0 simplify India’s tax structure by reducing slabs and bringing greater clarity for businesses and consumers. Essential goods benefit from lower or nil tax, while standard items are taxed at 18% and luxury or sin goods at 40%. Staying updated with the new GST rates is essential for accurate pricing, compliance, and better financial planning.
Contact RMCAuditors today for expert guidance and timely compliance support. For more details Text us on whatsApp or call us today .
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Common Questions
Frequently Asked Questions
The GST rate on gold in India is 3%. This rate applies to gold in any form, including bullion, coins, and jewellery.
Additionally, making charges on gold jewellery attract 5% GST when charged separately.
The GST rate on mobile phones is 18%. This rate applies to both feature phones and smartphones, whether manufactured in India or imported.
Under the revised GST 2.0 structure, the applicable GST rates on goods and services are:
- 0% (Nil-rated / Exempt)
- 5%
- 18%
- 40%
In addition, special rates apply to select items:
- 3% GST on gold, silver, and jewellery
0.25% GST on diamonds and precious stones
The correct GST slabs currently applicable in India are:
GST Slab | Applicability |
0% | Essential goods and exempt supplies |
5% | Daily-use essentials and priority sectors |
18% | Standard goods and services |
40% | Luxury and sin goods |
Special slabs | 3% and 0.25% for precious metals and stones |
The three main types of GST in India are:
- CGST (Central Goods and Services Tax) – Levied by the Central Government on intra-state supplies
- SGST (State Goods and Services Tax) – Levied by the State Government on intra-state supplies
IGST (Integrated Goods and Services Tax) – Levied by the Central Government on inter-state supplies and imports
GST must be paid by:
- Businesses registered under GST
- Suppliers of goods or services whose turnover exceeds the prescribed threshold
- E-commerce operators and certain notified categories, irrespective of turnover
- Importers of goods or services
- Persons liable under reverse charge mechanism (RCM)
Consumers ultimately bear the GST cost, while registered sellers collect and remit GST to the government.
