GST Rates on Common Products & Services in India (2026)

Most people only notice the GST line on a bill when it changes. After 22 September 2025, it changed for hundreds of everyday items at once, as India collapsed its four-slab system into two main rates and cut tax across the shopping basket. The result is that the rate on a packet of namkeen, a television, or a salon visit is often different from what it was a year ago, and knowing the current figure helps both shoppers and small sellers.

This guide is a practical, category-by-category list of GST rates on common products and services in India in 2026. It reflects the post-reform structure of nil, 5%, 18%, and 40%, drawing on the government's own announcement so the figures are authoritative rather than guessed.

The rate that applies to a specific product can hinge on its exact classification, so this list is a guide to the common categories rather than a substitute for the official notification. For any high-value or borderline item, the official rate notification remains the final word.

The four GST rate bands in 2026

India now taxes goods and services across four bands: a nil rate for essentials, 5% for daily-use items, 18% as the standard rate, and 40% for luxury and sin goods. The two working slabs are 5% and 18%, with nil and 40% applying to defined ends of the spectrum. This replaced the older 5%, 12%, 18%, and 28% structure.

The reform pushed most former 12% items down to 5% and most former 28% items down to 18%, simplifying the system and lowering tax on everyday spending. A narrow set of demerit goods moved up to 40%. The full background to the change is set out in the new GST rates guide, and the tax on any price can be computed at these slabs with IndiaPost's free GST calculator.

"The shift to a two-slab system of 5% and 18%, removing the earlier 12% and 28% rates, will make taxation more transparent and easier to follow." (Press Information Bureau, Government of India, 4 September 2025.)

GST on food and groceries

Most staple and packaged foods now sit at nil or 5%, which keeps the everyday grocery basket lightly taxed. Ultra-high-temperature milk, pre-packaged paneer, and all Indian breads moved to a nil rate, while a wide range of packaged foods dropped to 5%. This directly lowers the tax on a typical household's food spending.

The clear exception in this category is aerated and sugary drinks, which sit in the 40% band as demerit goods rather than essentials. So while a packet of namkeen is taxed lightly, a bottle of cola is taxed at the top rate. Shoppers see the contrast most sharply at the checkout between staples and sin goods.

GST on household and personal-care goods

Everyday household and personal-care goods moved firmly into the 5% band, lowering the tax on items a family buys every month. Soaps, shampoos, toothpaste, toothbrushes, and bicycles all dropped to 5% under the reform. These are high-frequency purchases, so the cut accumulates across a year of shopping.

Because these goods were previously taxed at 12% or 18%, the move to 5% is a meaningful reduction in their tax component. A retailer is expected to pass the lower rate through to the shelf price rather than retain it as margin. For a household, the saving shows up across the whole monthly basket rather than in any single item.

GST on electronics and consumer durables

Larger consumer durables that used to sit at 28% moved down to 18%, the new standard rate. Televisions above 32 inches, air conditioners, and dishwashers all fell from 28% to 18%, lowering the tax on a major household purchase. This both reduces prices for consumers and supports domestic electronics manufacturing.

For a buyer, a 10-percentage-point cut on a large appliance is a visible saving on a high-value purchase. The standard 18% rate now covers most electronics, which removes the old ambiguity over which appliance sat in which slab. This makes pricing simpler for both sellers and shoppers.

GST on automobiles

Mass-market vehicles moved from 28% to 18%, reducing the on-road price of the cars and two-wheelers most people buy. Small cars and two-wheelers up to 350cc dropped from 28% to 18%, as did buses, trucks, three-wheelers, and auto parts. High-end and luxury vehicles, by contrast, sit in the 40% band.

The split keeps tax low on the vehicles the middle class buys while reserving the top rate for luxury models. A family buying a small car or commuter two-wheeler therefore benefits directly from the cut. The lower rate on auto parts also feeds into cheaper servicing and repairs over time.

GST on healthcare and medicines

Healthcare saw some of the deepest cuts, with 33 life-saving drugs and diagnostic kits moving from 12% to nil. Other medicines, including Ayurveda and Unani preparations, moved to 5%, and spectacles fell sharply to 5%. Individual life and health insurance premiums were exempted from GST entirely.

The insurance exemption is among the most significant changes, since an 18% tax on premiums became a full exemption, lowering the cost of cover. For a family, cheaper medicines and exempt insurance reduce the tax burden on health spending considerably. The government linked the insurance change to its goal of wider coverage.

GST on education supplies

Basic education supplies moved to a nil rate, making the cost of learning materials lower for families. Exercise books, pencils, erasers, and crayons all moved to nil under the reform. This directly supports households with school-going children at the start of each academic year.

Other school items such as geometry boxes and school cartons moved to 5%, still a low rate. The effect is to keep the basic toolkit a student needs lightly taxed or untaxed. For a family buying supplies for several children, the nil rate on the core items is a clear saving.

GST on services

Several common consumer services were cut, while standard business services remain at the 18% rate. Hotel stays priced up to ₹7,500 per day moved from 12% to 5%, and personal-care and wellness services such as gyms, salons, barbers, and yoga fell from 18% to 5%. These cuts target everyday services households use.

The pattern is that consumer-facing services were cut while professional and business services stayed at the standard rate. So a salon visit or an affordable hotel stay is now taxed at 5%, while a consultancy invoice remains at 18%. This keeps the reform focused on everyday affordability.

GST on construction materials

Construction inputs were cut to support the housing sector, with cement the headline change. Cement moved from 28% to 18%, lowering a major input cost for both individual home builders and large projects. Several other building materials such as marble and granite blocks moved to 5%.

Because cement is a large share of construction cost, the cut feeds into cheaper homes and infrastructure over time. A person building or renovating a home benefits from the lower rate on cement and several allied materials. The change is intended to spur demand in real estate and construction.

GST on farming inputs

Agricultural inputs were cut to reduce costs for farmers, with tractors and farm machinery the main beneficiaries. Tractors moved from 12% to 5%, and equipment such as harvesters, threshers, sprinklers, and drip irrigation systems also moved to 5%. Bio-pesticides were likewise reduced to 5%.

These cuts lower the cost of mechanising and irrigating a farm, which matters for small and marginal farmers. Cheaper machinery and inputs support both productivity and the shift to more efficient farming. The reform deliberately treated agriculture as a priority sector for relief.

What stays at 40%

The 40% band is reserved for a narrow set of luxury and sin goods, the highest GST rate in the system. It covers pan masala, tobacco, aerated drinks, high-end cars, yachts, and private aircraft. These items were singled out to balance revenue against the wide cuts elsewhere.

"A 40% rate on luxury and sin goods such as pan masala, tobacco, aerated drinks, high-end cars, yachts, and private aircraft ensures fairness and revenue balance." (Press Information Bureau, Government of India, 4 September 2025.)

For certain tobacco products, the government noted that existing rates and compensation cess continue until separately notified, so not every item moved to 40% on day one. The intent is clear even where the timing differs: demerit goods carry the top rate. Everything else sits in the lower bands.

What the rate changes mean for a household bill

For an ordinary household, the cumulative effect of the cuts is a lower tax component across a typical month of spending. Groceries, personal care, school supplies, and a salon visit are all now taxed at nil or 5%, so the saving spreads across many small purchases rather than one. Over a year, that adds up even though no single bill changes dramatically.

Bigger-ticket items show the change more sharply, since a television or small car that moved from 28% to 18% carries a visibly smaller tax line. A family insuring its health gains the most, because the 18% tax on premiums became a full exemption. The reform was designed so that the relief is felt most by middle-class and everyday spending.

For a small seller, the same changes mean updating shelf prices and billing systems so customers actually receive the lower rates. A seller who keeps charging an old rate risks both a compliance problem and a loss of customer trust. Passing the cut through promptly is both the legal expectation and good business.

How to confirm the rate for a specific item

Because the rate can depend on a product's exact HSN or SAC code, this list is a guide rather than a final ruling for borderline items. A business setting a price should match the product to its code against the latest official notification - IndiaPost's free HSN code finder looks up the code and indicative rate by product keyword as a starting point. For everyday goods the band is usually obvious, but composite or mixed products need care.

Once the correct rate is known, the tax is collected and paid through the standard process set out in the GST payment guide, and importers should read it alongside customs duty in the customs duty guide. Treating the official notification as the single source of truth avoids both under-collection and overcharging. The list here covers the common cases that most shoppers and small sellers meet.

Looking ahead

The two-slab structure is expected to stay broadly stable, though the GST Council revises individual item rates periodically through notifications. For shoppers, the practical takeaway is that everyday goods are now taxed at nil or 5%, with 18% as the standard and 40% only for luxury and sin items. That simpler map is easier to remember than the old four-rate maze.

For a small seller, the lesson is to confirm each product's band, price it correctly, and pass through the lower rates the reform intended. Keeping a current rate list to hand prevents both compliance errors and lost goodwill from overcharging. As rates evolve, the official notification remains the place to check any change.

Key takeaways

• GST runs on four bands in 2026: nil, 5%, 18% (standard), and 40% (luxury and sin goods).
• Staple foods, key medicines, and individual life and health insurance are nil-rated.
• Household goods, packaged foods, medicines, tractors, and many services sit at 5%.
• Electronics, small cars and two-wheelers, cement, and standard services sit at 18%.
• Pan masala, tobacco, aerated drinks, and high-end cars sit at the top 40% rate.
• Use the HSN code finder to classify a product and the GST calculator to compute the tax at its slab.

Methodology

This rate list is compiled from the Press Information Bureau backgrounder on the Next-Gen GST reforms dated 4 September 2025 and the post-reform structure effective 22 September 2025. GST rates are set by the GST Council and revised through item-level notifications, and the rate for a specific product can depend on its exact HSN or SAC code, so readers should verify any specific item against the latest official notification before relying on it. This article is general information about taxation and is not tax or financial advice.