GST 2.0: Updated GST Rates (Effective 22 Sept 2025) & What They Mean for Your Business
India’s GST 2.0 has simplified slabs and revised rates across a wide range of goods and services. For business owners, the takeaway is simple: review your items, update tax masters and print formats, and start billing with the new GST rate without delay.
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The new GST rate structure at a glance
| GST Slab | What typically falls here | Why it matters |
|---|---|---|
| 0% | Essentials such as fresh milk, eggs, curd; unpackaged foodgrains; core educational & healthcare services | Keeps essentials affordable and compliance simple |
| 5% | Many daily-use consumer goods and packaged foods | Lower tax burden on common household items |
| 18% | Standard slab for most goods & services (e.g., insurance, telecom, ticketing; many consumer durables now shifted here) | The default operating slab for most businesses |
| 40% | Luxury & sin goods (e.g., premium cars, high-end bikes, aerated beverages) | Disincentivises non-essential or harmful consumption |
| Special rates | 3% (precious metals/jewellery category); 0.25% (certain diamonds/stones) | Narrow, item-specific slabs that continue under GST 2.0 |
GST Slab
0%
What typically falls here
Essentials such as fresh milk, eggs, curd; unpackaged foodgrains; core educational & healthcare services
Why it matters
Keeps essentials affordable and compliance simple
GST Slab
5%
What typically falls here
Many daily-use consumer goods and packaged foods
Why it matters
Lower tax burden on common household items
GST Slab
18%
What typically falls here
Standard slab for most goods & services (e.g., insurance, telecom, ticketing; many consumer durables now shifted here)
Why it matters
The default operating slab for most businesses
GST Slab
40%
What typically falls here
Luxury & sin goods (e.g., premium cars, high-end bikes, aerated beverages)
Why it matters
Disincentivises non-essential or harmful consumption
GST Slab
Special rates
What typically falls here
3% (precious metals/jewellery category); 0.25% (certain diamonds/stones)
Why it matters
Narrow, item-specific slabs that continue under GST 2.0
Key item movements (old GST rate → new GST rate)
0% GST (Exempt)
| Product / Service | Old GST rate | New GST rate |
|---|---|---|
| Individual life & health insurance policies | 18% | 0% (Exempt) |
| Maps, charts & globes | 12% | 0% (Exempt) |
| Pencils, sharpeners, erasers, crayons & notebooks | 5%–12% | 0% (Exempt) |
| Pre-packaged & labelled paneer | 5% | 0% (Exempt) |
| Indian breads (roti, paratha, parotta, etc.) | 5% | 0% (Exempt) |
Essentials like unbranded milk , unpacked grains , fresh fruits and vegetables , and core healthcare services remain at 0%.
Product / Service
Individual life & health insurance policies
Old GST rate
18%
New GST rate
0% (Exempt)
Product / Service
Maps, charts & globes
Old GST rate
12%
New GST rate
0% (Exempt)
Product / Service
Pencils, sharpeners, erasers, crayons & notebooks
Old GST rate
5%–12%
New GST rate
0% (Exempt)
Product / Service
Pre-packaged & labelled paneer
Old GST rate
5%
New GST rate
0% (Exempt)
Product / Service
Indian breads (roti, paratha, parotta, etc.)
Old GST rate
5%
New GST rate
0% (Exempt)
5% GST
| Product / Service | Old GST rate | New GST rate |
|---|---|---|
| Hair oil, shampoo, soap & toothpaste | 18% | 5% |
| Edible oils, butter, ghee, cheese & dairy spreads | 12% | 5% |
| Packaged foods (namkeen/biscuits, pasta, cereals, etc.) | 12%–18% | 5% |
| Utensils & kitchenware; bicycles | 12%–18% | 5% |
| Apparel & footwear up to ₹2,500 | 12% | 5% |
| Jams/sauces/pickles/soups; dry fruits & nuts | 12%–18% | 5% |
| Hotels (₹1,000–₹7,500 tariff), salons/gyms/yoga services | 12%–18% | 5% |
| Primary inputs like packaging materials | 12%–18% | 5% |
Product / Service
Hair oil, shampoo, soap & toothpaste
Old GST rate
18%
New GST rate
5%
Product / Service
Edible oils, butter, ghee, cheese & dairy spreads
Old GST rate
12%
New GST rate
5%
Product / Service
Packaged foods (namkeen/biscuits, pasta, cereals, etc.)
Old GST rate
12%–18%
New GST rate
5%
Product / Service
Utensils & kitchenware; bicycles
Old GST rate
12%–18%
New GST rate
5%
Product / Service
Apparel & footwear up to ₹2,500
Old GST rate
12%
New GST rate
5%
Product / Service
Jams/sauces/pickles/soups; dry fruits & nuts
Old GST rate
12%–18%
New GST rate
5%
Product / Service
Hotels (₹1,000–₹7,500 tariff), salons/gyms/yoga services
Old GST rate
12%–18%
New GST rate
5%
Product / Service
Primary inputs like packaging materials
Old GST rate
12%–18%
New GST rate
5%
18% GST
| Product / Service | Old GST rate | New GST rate |
|---|---|---|
| Consumer durables (ACs, TVs, refrigerators, washing machines) | 28% | 18% |
| Small cars (mass-market) & motorcycles ≤350cc | 28% | 18% |
| Commercial vehicles; auto parts | 28% | 18% |
| Cement; batteries | 28% | 18% |
| Capital goods & industrial intermediates | 18% | 18% |
| Telecom (postpaid mobile) & broadband services | 18% | 18% |
| Many consumer electronic items | 28% | 18% |
Product / Service
Consumer durables (ACs, TVs, refrigerators, washing machines)
Old GST rate
28%
New GST rate
18%
Product / Service
Small cars (mass-market) & motorcycles ≤350cc
Old GST rate
28%
New GST rate
18%
Product / Service
Commercial vehicles; auto parts
Old GST rate
28%
New GST rate
18%
Product / Service
Cement; batteries
Old GST rate
28%
New GST rate
18%
Product / Service
Capital goods & industrial intermediates
Old GST rate
18%
New GST rate
18%
Product / Service
Telecom (postpaid mobile) & broadband services
Old GST rate
18%
New GST rate
18%
Product / Service
Many consumer electronic items
Old GST rate
28%
New GST rate
18%
40% GST
| Product / Service | Old GST rate + cess | New GST rate |
|---|---|---|
| Luxury & premium cars | 28% + up to 22% cess | 40% |
| Motorcycles >350cc (premium bikes) | 28% + cess (varied) | 40% |
| Aerated & carbonated beverages | 28% + cess (varied) | 40% |
| Betting & online gaming (industry overview) | 28% | 40% |
| Performance parts such as tyres | 28% + cess (varied) | 40% |
Product / Service
Luxury & premium cars
Old GST rate + cess
28% + up to 22% cess
New GST rate
40%
Product / Service
Motorcycles >350cc (premium bikes)
Old GST rate + cess
28% + cess (varied)
New GST rate
40%
Product / Service
Aerated & carbonated beverages
Old GST rate + cess
28% + cess (varied)
New GST rate
40%
Product / Service
Betting & online gaming (industry overview)
Old GST rate + cess
28%
New GST rate
40%
Product / Service
Performance parts such as tyres
Old GST rate + cess
28% + cess (varied)
New GST rate
40%
Special rates that continue
| Products | New GST rate |
|---|---|
| Gold & jewellery (select items) | 3% |
| Non-industrial / semi-processed diamonds | 0.25% |
| Silver items | 3% |
Note: Some items within luxury/sin categories will transition into the 40% slab over time. Always verify HSN/SAC-wise applicability before invoicing.
Products
Gold & jewellery (select items)
New GST rate
3%
Products
Non-industrial / semi-processed diamonds
New GST rate
0.25%
Products
Silver items
New GST rate
3%
What MSMEs/SMEs should do right now
Review your item master
Map each SKU/service to its correct new GST rate. Pay special attention to items that moved from 28%→18% and 12%→5%.
Update billing & print formats
Reflect the new GST rate on invoices, estimates, delivery challans, e-way bills, and credit/debit notes.
Revise pricing & margin policies
With certain rates reduced (e.g., 28%→18%, 12%→5%), review MRPs, discounting, and landed costs to stay competitive.
Reconfigure HSN/SAC & tax logic
Ensure your tax computation and rounding rules match current slabs; keep a changelog for audit trails.
Communicate proactively
Inform customers and partners about price/tax changes to avoid disputes and returns.
Explore All BUSY Calculators for Easy GST Compliance
How BUSY helps you switch to the new GST rate—fast
- One-time GST master update: Quickly update item-wise tax rates in bulk.
- Auto-apply correct tax on billing: BUSY auto-picks HSN/SAC-based rates to prevent manual errors.
- GST print formats ready: Invoice, e-way bill, e-invoice, and credit/debit notes reflect the new GST rate instantly.
- Accurate returns & reconciliations: File GSTR-1/3B with confidence; reconcile with vendors/customers faster.
- Audit-friendly logs: Maintain rate-change history and item-level trails for compliance reviews.
- Desktop + Cloud + Mobile: Work from office or on the go—your latest GST settings follow you everywhere.
