As of July 2025, India’s Goods and Services Tax (GST) continues to operate under a multi-tiered structure, designed to balance affordability for consumers with revenue generation for the government. The GST Council periodically reviews and updates these rates to reflect economic needs and policy objectives. Here’s an overview of the current GST rates and recent developments:
GST Rate Slabs in 2025
1. 0% (Nil-Rated) – Essential Goods and Services
These items are exempt from GST to keep basic necessities affordable:
- Unpacked food grains (rice, wheat, maize)
- Fresh fruits and vegetables
- Milk, curd, and eggs
- Unbranded natural honey
- Children’s drawing and colouring books
- Educational and healthcare services
- Public transport services
2. 5% – Commonly Used Goods and Services
This slab covers items of mass consumption:
- Packed paneer, tea, sugar
- Edible oils
- Domestic LPG
- Life-saving drugs
- Footwear priced below ₹500
- Apparel priced below ₹1,000
- Public transport (e.g., bus fares)
3. 12% – Standard Goods and Services
Items that are processed or semi-essential fall under this category:
- Butter, ghee, and processed foods
- Mobile phones
- Fruit juices
- Umbrellas
- Footwear priced between ₹500 and ₹1,000
- Hotel rooms with tariffs between ₹1,000 and ₹7,500
4. 18% – General Goods and Services
This is the most common GST slab, covering a wide range of items:
- Toothpaste, soap, and hair oil
- Ice cream and pasta
- Computers and printers
- Restaurant services (non-AC and AC, except luxury hotels)
- Hotel rooms with tariffs above ₹7,500
5. 28% – Luxury and Sin Goods
This highest slab applies to luxury items and goods considered harmful:
- Small cars (plus 1% or 3% cess)
- High-end motorcycles (plus 15% cess)
- Consumer durables like ACs and refrigerators
- Luxury cars and SUVs
- Cigarettes and aerated drinks (plus 15% cess)
Recent Developments and Proposed Changes
- Elimination of 12% Slab: The government is considering removing the 12% GST slab to simplify the tax structure. Items currently under this slab may be moved to either the 5% or 18% categories, potentially reducing prices for daily-use goods like toothpaste, utensils, clothing, and shoes.
- Three-Slab Structure Proposal: PwC India has suggested a simplified three-rate GST structure to streamline the current multiple-tax regime. This proposal aims to reduce complexity and enhance compliance.
- Inclusion of Petroleum Products: There’s a proposal to include petroleum products within the GST framework, starting with Aviation Turbine Fuel (ATF), to unify the tax system further.
Special GST Rates
- 3% GST: Applicable to precious metals and stones, including gold, silver, diamonds, and imitation jewellery.
- 0.25% GST: Levied on non-industrial diamonds and unworked precious stones.
Conclusion
The GST structure in India as of 2025 continues to evolve, with proposals aimed at simplifying the tax regime and reducing the burden on consumers. Staying informed about these changes is crucial for both businesses and consumers to ensure compliance and make informed financial decisions.
If you have specific questions about GST rates for particular goods or services, feel free to ask!
