GST Rates in India 2025 – Check List of Latest Goods and Service Tax Rates

Replacing various indirect taxes, including VAT, excise duty, and service tax, GST – a unified tax system came into existence on July 1st, 2017. GST operates on many levels of rate structure, catering to diverse goods and services. In this blog, we will look into the various GST rates in India and their impact on businesses and consumers. 

Kinds of GST Rates and Structures in India

The basic GST slabs for taxpayers are 0%, 5%, 12%, 18% and 28%. Some of the other commonly applied GST rates are 3% and 0.25%. 

Moreover, the taxable composition people need to pay General Service tax at lower rates- 1.5%, 5% or 6%. Two other categories include TDS and TCS, with respective rates of 2% and 1%, respectively. In addition to these mentioned GST rates, the law imposes a cess on the sale of certain items, including cigarettes, tobacco, aerated water, gasoline and motor vehicles, with rates ranging from 1% to 204%.  

HSN and SAC System

GST rates have been set in five slabs based on the HSN or SAC code, namely NIL, 5%, 12%, 18%, and 28%. 0% GST rate is applied on certain categories, including basic food items. 

The following tables talk about specific lists of items that come under 0%, 5%, 12%, 18% and 28% categories. Let us look at them one by one.  

List of the Items Under 0% GST

List of Items Under 5% GST

List of Items Under 12% GST

List of Items Under 18% GST

List of Items Under 28% GST

Why Understanding GST Rates is Important?

• For Businesses: Accurate knowledge of GST helps ensure compliance with regulations, avoiding penalties and facilitating smoother operations.
• For Consumers: GST transparency helps in understanding the final pricing of products and services, ensuring no hidden costs.
• For Government: GST collections contribute to public infrastructure, healthcare, education, and more.

Difference Between GST Rates in India and Other Countries

The GST in India differs from the GST in other countries in several ways. Here are some of the key differences:

• Dual GST Structure: India follows a dual GST structure, which means that both the central and state governments have the power to impose GST. This is completely different from other countries like Australia, Canada, and Singapore. For instance, In Canada, the federal government takes the responsibility for administering and collecting GST, while the provinces impose separate provincial sales taxes.
• Multiple GST Rates: India follows a multi-tiered GST rate structure, with four rates of 5%, 12%, 18%, and 28%. In contrast, many other countries have a single GST rate or a few rates. For instance, in Australia, the GST rate is a flat 10%, while in Singapore, it is 7%.
• Petroleum Products: In India, certain petroleum products do not come under the GST system, including petrol, diesel, and aviation turbine fuel are not included in the GST system. Other countries have a different structure.  For example, in Australia, GST is levied on petrol and diesel.
• Threshold for GST Registration: Businesses in India are free from GST registration if their yearly revenue is less than INR 20 lakhs (INR 10 lakhs for special category states). Compared to many other nations, this criterion is far lower. For instance, companies with yearly sales of CAD 30,000 or less are exempt from GST registration in Canada, whereas companies with yearly sales of less than AUD 75,000 are exempt in Australia.
• Input Tax Credit: India differs from other nations in terms of the availability and use of the Input Tax Credit (ITC). Businesses in India are eligible to claim the Input Tax Credit (ITC) on GST paid on goods and services used for business. However, firms face difficulties in complying with the complicated and tight criteria for claiming ITC. On the other hand, ITC regulations are more lenient in other nations such as Canada.
• Compliance Burden: Compliance requirements for GST in India are considered to be more complex and burdensome compared to other countries. In India, businesses are required to file monthly or quarterly GST returns, depending on their turnover, and comply with various other compliance requirements.

Conclusion: 

India’s GST rate structure, which has several slabs and categories, reflects the country’s varied economic environment and the need to strike a balance between affordability and revenue generation. Although the tiered system guarantees fair taxes on necessities, luxuries, and inferior goods, it also introduces complexity in contrast to other nations’ more straightforward systems.

Additional Resources

• What is GST?
• Types of GST in India
• What is GST Invoice?