On 22 September 2025, India's Goods and Services Tax moved to a simpler rate structure. The GST Council, in its meeting on 3 September 2025, approved a two-main-slab system of 5% and 18%, with a special 40% rate for luxury and sin goods. The older 12% and 28% slabs were removed. Nil-rated (0%) items continue.
This guide explains what changed, shows how to add or remove GST with worked examples, and points you to the official sources for product-level rates. You can also try the numbers yourself in our free GST calculator.
The GST slabs at a glance
| Rate | What it generally covers |
|---|---|
| 0% | Nil-rated and exempt items, such as many basic food items and services |
| 3% | A special low rate that continues for items such as gold |
| 5% | Essentials and many everyday goods and services |
| 18% | The standard rate for most goods and services |
| 40% | A new special rate for luxury and sin goods, such as tobacco products and very high-end cars, according to reports |
This table is a general guide. The exact rate for any product or service is set by official notification, so check the CBIC or GST Portal for your item before you bill a customer.
What changed from the old slabs
- 12% slab removed. Reports say most items that were taxed at 12% moved to 5%.
- 28% slab removed. Reports say most items that were taxed at 28% moved to 18%.
- 40% added. A new rate applies to a short list of luxury and sin goods that were earlier taxed at 28% plus cess.
- 18% and 5% stay. These remain the two main working rates for most businesses.
If you issue invoices, check that your billing software and price lists no longer use 12% or 28% for new supplies. Our GST invoice generator offers the current slabs only.
How to add GST to a price
Multiply the base price by the GST rate, then add it to the price.
Example: a service priced at ₹10,000 with 18% GST. GST = ₹10,000 × 18% = ₹1,800. Total = ₹10,000 + ₹1,800 = ₹11,800.
How to remove GST from a GST-inclusive price
When the price already includes GST, divide it by 1 plus the rate as a decimal.
| Price including GST | Rate | Calculation | Base price | GST |
|---|---|---|---|---|
| ₹1,050 | 5% | 1,050 ÷ 1.05 | ₹1,000 | ₹50 |
| ₹11,800 | 18% | 11,800 ÷ 1.18 | ₹10,000 | ₹1,800 |
| ₹14,000 | 40% | 14,000 ÷ 1.40 | ₹10,000 | ₹4,000 |
A common mistake is to subtract 18% from the total. Taking 18% of ₹11,800 gives ₹2,124, which is wrong, because the GST was calculated on the base price and not on the total. Use the divide-by method, or switch the calculator to Remove GST.
CGST, SGST and IGST
The tax is the same in total, but it is split differently depending on where the seller and the buyer are:
- Same state: the rate is split equally into CGST and SGST. At 18%, that is 9% CGST and 9% SGST. At 5%, it is 2.5% each.
- Different states: the full rate is charged as IGST. At 18%, that is 18% IGST.
The GST invoice generator chooses CGST and SGST or IGST for you based on the states you pick.
Invoice basics that save trouble later
- Use a unique, consecutive invoice number of up to 16 characters, and never repeat one.
- Show the GSTIN of the seller, and of the buyer when the buyer is registered.
- Show each line's rate, taxable value and tax amount clearly.
- Keep a copy of every invoice you issue.
To check a supplier's GSTIN, use the GSTIN validator. It checks the structure and checksum, but it cannot tell you whether the business is currently registered. For that, search the number on the official GST Portal.
Pricing after the change
When a rate falls, a business has to decide whether to pass the saving to the customer or protect its margin. Use the profit margin calculator to see how a new GST rate affects the price you need for a target margin, and check any guidance on pricing that applies to your sector.
Where to check the exact rate
Rates for specific goods and services are listed in official notifications, so confirm yours before billing. The CBIC website lists notifications and rate schedules, the GST Portal has the latest updates for taxpayers, and the GST Council publishes its decisions. This article is general information and not tax advice, so speak to a tax professional for your own case.
Frequently asked questions
What are the GST rates in India now?
After 22 September 2025, the main GST rates are 5% and 18%, plus a special 40% rate for luxury and sin goods. Nil-rated (0%) items continue, and a small 3% rate remains for items such as gold. The old 12% and 28% slabs no longer apply. Check the official notification for the exact rate of any product or service.
Which GST slabs were removed?
The 12% and 28% slabs were removed in the rationalisation approved by the GST Council on 3 September 2025. Reports say most goods from the 12% slab moved to 5%, and most goods from the 28% slab moved to 18%. Some items, such as luxury and sin goods, now fall under the new 40% rate.
How do I remove GST from a GST-inclusive price?
Divide the total price by 1 plus the GST rate as a decimal. For a ₹11,800 total at 18%, divide by 1.18 to get a base price of ₹10,000, so the GST is ₹1,800. The same method works for any slab, such as dividing by 1.05 for 5% or by 1.40 for 40%.
What is the difference between CGST, SGST and IGST?
When a seller and buyer are in the same state, the GST is split equally into Central GST (CGST) and State GST (SGST). For example, 18% becomes 9% CGST and 9% SGST. When they are in different states, the full rate is charged as Integrated GST (IGST). The total tax is the same either way.
Do I have to charge GST if I am a small seller?
It depends on your turnover, the type of supply and your state. Businesses below the registration threshold may not need to register, but some supplies need registration regardless of turnover. Check the GST Portal or ask a tax professional before deciding, because the thresholds differ by supply type and state.
How can I check whether a GSTIN is valid?
A GSTIN has 15 characters: a 2-digit state code, the 10-character PAN, an entity number, the letter Z and a checksum character. A validator can check the structure and checksum, but only the GST Portal can confirm that a business is currently registered. Use both when you verify a supplier.
Sources and further reading
Last reviewed 26 October 2026 by the Gopafy team. Rules, rates and prices change, so confirm anything important with the official source.
Try these free tools
- GST Calculator Free GST calculator for India. Add or remove GST (reverse GST) at 0%, 3%, 5%, 18% and 40% and split CGST, SGST and IGST.…
- GST Invoice Generator Create a GST tax invoice PDF with GSTIN, HSN or SAC codes, CGST, SGST or IGST and the amount in words. Free, built in…
- GSTIN Validator Check the format and checksum of a 15-character GSTIN and see its state, PAN and entity code. Checks structure only;…
- Profit Margin Calculator Work out gross margin, markup and net profit from cost and price, or find the selling price for a target margin. Free,…
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