GST rates after 22 September 2025
The two-slab structure, what it changes for your invoices and credit, and a checklist for your billing.
From 22 September 2025, the main GST structure moved to two slabs of 5% and 18%, with 0% for exempt items and a special 40% rate for a limited list of luxury and sin goods. The older 12% and 28% slabs were removed.
| Rate | Typical use |
|---|---|
| 0% | Specified essentials and exempt supplies |
| 5% | Goods and services moved from the lower slabs |
| 18% | The standard rate; most items earlier at 12% or 28% moved here or to 5% |
| 40% | A short list of luxury and demerit goods |
Compensation cess continues on some goods, such as tobacco and pan masala. Special low rates such as 3% for specified goods continue.
What to check in your business
- Classification. Confirm the HSN or SAC for each item and read the notified rate. Do not assume a move from the old slab.
- Billing software. Update rate masters and test invoices.
- Time of supply. For supplies spanning the change date, the time of supply decides the rate.
- Contracts and price lists. Check whether prices are inclusive or exclusive of tax, and who bears the effect of a rate change.
- Inverted duty and refunds. If a rate change makes inputs taxed higher than outputs, check refund eligibility.
- Stock held. Review your credit position on opening stock.
Use the GST calculator to add or remove GST at any rate. Read the complete GST guide for registration, credit and appeals.
Related articles
- GST: registration, returns, credit, notices and appealsA practical guide to Goods and Services Tax for businesses: who must register, what rate applies after the September 2025 reforms, how input tax credit works, and what to do when a notice arrives.
- Input tax credit and GSTR-2B reconciliationWhen credit is allowed, how to reconcile with GSTR-2B every month, and the common reasons credit is denied.