India's New GST Slabs 2025 List: Revised GST Structure. India's New GST Slabs, Revised GST Structure Effective from September 22, 2025.
India's New GST Slabs 2025 List: Revised GST Structure
The new GST slab structure simplifies the earlier multiple tax brackets into a more straightforward framework aimed at boosting consumption and easing compliance. Here is the detailed list of the revised GST slabs and their main features.
| GST Rate | Key Items Covered | Notes |
|---|---|---|
| 0% (Exempt) | Essential daily needs like fresh fruits, vegetables, milk, bread. Also includes personal health and life insurance, educational essentials like exercise books, maps & charts. | Essential items are completely tax-free. |
| 5% | Common goods such as packaged food, footwear, medicines, small household items (like hair oil, shampoo, soaps), dairy products, agriculture machinery, stationery. | Meant for essential, lower-cost consumer products and priority sectors. |
| 18% | Most services (restaurants, telecom, financial), electronics (TVs, refrigerators, laptops), motorcycles ≤350cc, cars ≤1200cc petrol and diesel ≤1500cc engines, cement. | Standard tax rate for most goods and services. |
| 40% | Luxury and sin goods including luxury cars, premium bikes, tobacco products, aerated & caffeinated beverages. | Highest slab aimed at luxury consumption and demerit goods. |
Key Highlights of GST 2.0 Slab Rationalisation
- The previous GST slabs of 12% and 28% have been abolished, replaced by just three core slabs—5%, 18%, and a special 40% for select luxury/sin goods. A 0% exemption slab remains for essential items.
- Small cars (up to 1200cc petrol, 1500cc diesel) now attract a significantly reduced GST of 18%, down from roughly 43% effective rate earlier (28% + cess). Similarly, motorcycles up to 350cc also now attract 18%.
- Electronics such as TVs, washing machines, laptops are taxed at 18%, down from the previous 28%.
- Daily consumables like butter, ghee, cheese, chocolates, toiletries, and packaged foods have their GST rate reduced to 5%.
- A new demerit/good tax slab of 40% is introduced to target luxury automobiles, high-end bikes, tobacco, aerated drinks, and caffeinated beverages.
- Personal health and life insurance premiums have become exempt (0% GST).
- Agricultural machinery and related products have moved to 5%, supporting rural and farming sectors.
Impact and Benefits
- The new tax slab structure makes the GST regime simpler and easier for businesses to comply with ongoing tax payments and filings.
- Consumers find essentials, household items, and common vehicles more affordable due to lower GST rates.
- Luxury consumption is taxed heavily to balance revenue and discourage overindulgence in sin goods.
- The uniform slabs reduce the scope for litigation and confusion over classification.
| Item Category | Old GST Rate | New GST Rate |
|---|---|---|
| Essential food & daily essentials | Nil to 12% | 0% and 5% |
| Small cars, motorbikes ≤350cc | 28% + cess (~43%) | 18% |
| Electronics & appliances | 28% | 18% |
| Personal health and life insurance | 18% | 0% |
| Luxury cars, premium bikes | 28% + cess (~43-48%) | 40% |
| Tobacco, aerated and caffeinated drinks | 28% + cess (~43%) | 40% |
This rationalized GST slab structure is a landmark reform simplifying tax rates, lowering costs for consumers on essentials and vehicles, and imposing higher taxes on luxury and sin goods, making the Indian tax environment more equitable and growth-oriented.
