Glossary term
GST Rate
GST rate is the percentage at which the Centre and states jointly tax goods and services in India. The total GST rate is split into CGST (Central GST) and SGST (State GST) for intra-state transactions, or charged as IGST (Integrated GST) for inter-state transactions.
Current GST Rate Structure
After the 56th GST Council meeting on 3 September 2025, the 12% and 28% slabs were abolished. The four slabs that now apply:
| Rate | Full GST | CGST + SGST (intra-state) | What it covers |
|---|---|---|---|
| 0% | 0% | 0% + 0% | Fresh fruits, vegetables, milk, bread, eggs, education, healthcare |
| 5% | 5% | 2.5% + 2.5% | Sugar, tea, edible oil, passenger transport, small restaurants |
| 18% | 18% | 9% + 9% | Most services, electronics, phones, processed foods, financial services |
| 40% | 40% | 20% + 20% | Luxury cars, aerated drinks, pan masala, AC restaurants (5-star) |
The 40% rate covers sin and luxury goods. Items that were in the old 12% or 28% slabs were moved to one of these four slabs. No goods or services in India are taxed at 12% or 28% after 22 September 2025.
How to Find the Right GST Rate
Every product or service has an HSN code (Harmonized System of Nomenclature). The GST rate is determined by the HSN code of what you are buying or selling. The CBIC publishes the GST rate schedule with rates for each HSN chapter.
For example:
- HSN chapter 2202 (aerated waters): 40% GST
- HSN chapter 0901 (coffee): 5% GST
- HSN chapter 8471 (computers): 18% GST
GST on Financial Services
GST on financial services including credit card fees, debit card charges, and loan processing fees is charged at 18%. This is important for anyone comparing the cost of financial products. For example, if a credit card charges an annual fee of Rs 500, GST at 18% adds Rs 90, making the total Rs 590.
Input Tax Credit and GST Rate
A registered business can claim input tax credit on GST paid on purchases. The ITC must match the rate and HSN of the inputs used in making the outputs. ITC cannot be claimed on GST paid for items used for personal purposes.
Source: CBIC GST rate schedule; 56th GST Council meeting, 3 September 2025.
Related terms
- GST
Goods and Services Tax — a single indirect tax on most goods and services in India.
- GST on Card Fees
GST applied on annual and processing fees.