GST Rates in India Slabs, HSN Codes & List (2026)

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By Raseed Raseed Editorial Team

Last Updated Nov 3, 2026 · 4:55 PM

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GST rates affect the price of almost every taxable product or service we buy, from household items and food products to vehicles and professional services. For businesses, choosing the correct rate is also important because it affects invoicing, tax collection, returns, and pricing.

As of 2026, the GST rate structure has been simplified around a 5% merit rate and an 18% standard rate, along with a special 40% rate for selected luxury and demerit goods and services. Some goods and services are also exempt or nil rated. The exact rate still depends on the classification and applicable GST notification.

What Is the GST Rate?

The GST rate is the percentage of tax charged on the taxable value of a product or service.

For example, if a taxable product costs ₹10,000 and attracts 18% GST, the GST amount would be ₹1,800. The customer would pay ₹11,800 in total. The applicable rate is not decided simply by the type of business. It depends on the specific goods or services being supplied and their classification under GST.

GST Rate Slabs in India for 2026

The current GST structure broadly includes the following rates:

GST Rate	General Category
0% / Nil	Selected essential goods and exempt supplies
5%	Merit and commonly used goods and services
18%	Standard rate for many goods and services
40%	Selected luxury and demerit goods and services

The GST Council recommended moving from the earlier four-rate structure towards a simpler two-rate structure of 5% and 18%, with 40% applying to selected goods and services. The revised rates were implemented for most goods and services from September 22, 2025, with specific transition rules for certain tobacco and related products.

Common Goods and Services Under Different GST Rates

The exact rate can vary by product specification, classification, and notification. Some broad examples are given below.

Nil Rated and Exempt Supplies

Certain essential goods and specified services are either nil rated or exempt from GST.

Examples can include certain food products, fresh agricultural produce, specified healthcare services, and other items covered by GST exemption notifications.

Businesses should check the specific product classification instead of assuming that an entire category is automatically exempt.

5% GST

The 5% rate covers a range of commonly used goods and selected services.

Following the 2025 rate changes, several everyday products were moved to the 5% category, including items such as certain household products, personal care products, bicycles, and kitchenware.

18% GST

The 18% rate continues to be the standard GST rate for many goods and services.

It applies to a wide range of products and services, including various consumer goods, professional services, technology related services, and other taxable supplies.

40% GST

The 40% rate is a special rate for selected luxury and demerit goods and services.

Following the revised structure, specified high value or demerit products are subject to this rate. Tobacco and nicotine related products were also moved to the revised structure with specific implementation rules from February 1, 2026.

Understanding HSN and SAC Codes

GST rates are linked to the classification of goods and services.

HSN, or Harmonized System of Nomenclature, is used to classify goods, while SAC, or Services Accounting Code, is used for services.

Businesses use these codes when preparing GST invoices and reporting transaction details. The correct classification is important because two products that appear similar may have different GST treatment based on their specifications and classification.

Businesses should therefore verify the applicable HSN or SAC code along with the GST rate before creating invoices.

Why Correct GST Classification Matters

Using the wrong GST rate can affect more than the tax amount on one invoice. An incorrect rate can lead to underpayment or excess collection of GST, changes to invoice values, and difficulties while reconciling GST returns.

For businesses handling many products, manually checking the rate for every invoice can also become difficult. Maintaining updated product details with the correct HSN code and tax rate can make billing more accurate.

GST Rates and Business Billing

The GST rate directly affects the final invoice value.

For example, a business selling a product worth ₹50,000 at 18% GST would charge ₹9,000 as GST, making the invoice total ₹59,000.

If the product is actually covered under a different rate, the tax calculation and invoice total would change. This is why businesses should review their product classification, HSN code, and applicable GST rate whenever there is a change in the GST rate structure.

Keep GST Billing Accurate with Raseed

For businesses managing regular sales, keeping product, pricing, and GST details organized can make daily billing easier.

Raseed helps businesses manage billing, inventory, expenses, customer records, GST related information, and business reports in one place. By maintaining product and transaction records properly, businesses can make it easier to prepare invoices and review their GST related information.

Check the Latest GST Rate Before Billing

GST rates in India can change when the GST Council recommends changes and the relevant notifications are issued. The rate that applies to a product or service should therefore be checked based on its current classification and the latest applicable notification.

For businesses, accurate GST billing starts with using the correct product or service classification, HSN or SAC code, and tax rate. Keeping these details updated helps reduce billing errors and supports more accurate GST reporting.