Updated 5 June 2025
1. Why GST Rates Matter
Every time the GST Council meets, a price tag somewhere changes. One tweak in the slab can raise business costs or lower your household budget. With the 56‑th Council meeting expected in June 2025, it pays to know where things stand today and what may change next.
2. GST in a Nutshell
- Goods and Services Tax (GST) is a single, destination‑based tax on the value added at every stage of production or supply.
- It replaced most indirect taxes on 1 July 2017.
- Three components share the tax: CGST (Centre), SGST/UTGST (State or Union Territory) and IGST (inter‑state or import). CGST + SGST always add up to IGST.
3. Current GST Rate Structure
| Standard Slabs | Other Niche Rates | Who typically pays? |
|---|---|---|
| 0 % (Nil) | 0.25 % | Basic food, public services |
| 5 % | 3 % | Most mass‑consumption goods |
| 12 % | – | Processed foods, mobiles, umbrellas |
| 18 % | – | Toiletries, computers, services |
| 28 % | – | Cars, ACs, luxury & sin goods |
Additional Compensation Cess (1 % – 204 %) applies to select items such as cigarettes, petrol cars and aerated drinks.
4. What Sits in Each Slab? (Sample items)
0 % – milk, fresh vegetables, unbranded atta, educational & health services
5 % – packed paneer, tea, edible oils, domestic LPG, footwear under ₹500
12 % – butter, ghee, fruit juice, packed coconut water, mobile phones
18 % – hair oil, toothpaste, printers, pasta, ice‑cream
28 % – small cars (+ cess), consumer durables like air‑conditioners, luxury bikes
3 % – gold, silver, imitation jewellery, diamonds
0.25 % – unworked precious and semi‑precious stones
(Need the exact rate for any product? Search its HSN code in our GST Rate Finder.)
5. Key Notifications in 2025
| Notification (CGST) | Effective | What Changed? |
|---|---|---|
| 1/2025 | 16 Jan | Fortified rice kernels now 5 % (was 18 %) |
| 2/2025 | 16 Jan | Gene‑therapy drugs fully exempt |
| 3/2025 | 16 Jan | Inputs for government‑approved free‑meal packs taxed at 5 % |
| 4/2025 | 16 Jan | Sale of used electric vehicles: 18 % on margin (was 12 %) |
| 5/2025 | 1 Apr | ‘Declared tariff’ scrapped; new “specified premises” rule for hotels |
| 6/2025 | 16 Jan | NSDC‑approved skill training and motor‑accident‑fund insurance now exempt |
| 7/2025 | 16 Jan | Reverse‑charge limited to individuals/unincorporated suppliers; composition dealers excluded |
| 8/2025 | 1 Apr | Hotel “specified premises” definition aligned with Notification 5/2025 |
6. Highlights from the 55‑th GST Council (Dec 2024)
(These changes take effect after formal notification in Jan 2025.)
- Fortified rice kernels → 5 %
- Gene‑therapy treatments → Exempt
- Food ingredients for free community meals → 5 %
- Used electric cars sold individual‑to‑individual → 5 %
- Penal charges on loan defaults → Exempt
- ACC blocks with > 50 % fly‑ash → 12 % (up from 5 %)
- Fresh or dried black pepper supplied by farmers → No GST
7. Other Recent Council Decisions
- 54‑th Meeting (Jul 2024) – Namkeens down to 12 %, car seats up to 28 %, select cancer drugs cut to 5 %.
- 53‑rd Meeting (Mar 2024) – Neutral alcohol for liquor → exempt, solar cookers 12 %, hostel accommodation (≤ ₹20,000 / mth, ≥ 90 days) → exempt.
- 52‑nd Meeting (Oct 2023) – Millet flour 0 %/5 %, GST on molasses cut to 5 %, broad relief for water‐supply contracts to local bodies.
- 50‑th Meeting (Jul 2023) – Uncooked snack pellets, fish paste, LD‑slag lowered to 5 %; satellite launch services fully exempt.
8. What to Watch in 2025
The Council’s Group of Ministers on Rate Rationalisation is studying a merger of the 12 % and 18 % slabs and pruning most exemptions. A mid‑year decision could redraw the rate map—especially for consumer durables and restaurant services.
9. FAQs (Quick Reads)
Q1. How are CGST and SGST split?
For an intra‑state sale, the GST rate is halved between CGST and SGST. If IGST on an inter‑state sale is 18 %, the seller charges 9 % CGST + 9 % SGST instead.
Q2. Is petrol under GST?
Not yet. Petrol, diesel, ATF, natural gas, alcoholic liquor, and electricity remain outside GST and continue under state taxes or excise.
Q3. Does GST apply to small hotels?
Yes, but from 1 April 2025 only “specified premises” (rooms once priced above ₹7,500 per night or self‑declared as such) charge 12 % or 18 %; other rooms may remain at 0 %/5 %.
Q4. What is the GST on used cars?
For individuals selling to individuals, GST is paid only on the dealer’s margin (not the full resale value). Used EVs attract 5 % if sold as‑is, but 18 % on refurbishment profit for dealers.
10. Stay Compliant, Stay Ahead
GST is more than a tax; it is a constantly moving target. Use automated GST software, stay tuned to Council updates, and bookmark this guide so you’re never caught off‑guard by a slab change.
Need help calculating your exact liability? Try our free GST Calculator and Input‑Credit Optimiser to get real‑time figures and reduce cash outflows.
