GST Rates in India 2026 โ Complete Guide
Understand GST slab rates of 5%, 12%, 18%, and 28% with examples of items in each category, input tax credit, and how to calculate GST for your business.
The Goods and Services Tax (GST) unified India's indirect tax system when it was introduced on 1st July 2017. It replaced multiple taxes like excise duty, VAT, service tax, and others. Understanding GST rates is essential whether you are a business owner, a professional filing returns, or simply a consumer wanting to know how much tax you pay. This guide covers everything you need to know about GST rates in India in 2026.
GST Rate Structure
India follows a four-tier GST rate structure along with special rates for certain items:
- 0% (Exempt): Essential items like fresh fruits, vegetables, milk, bread, salt, education services, and healthcare services.
- 5% GST: Items of daily necessity such as sugar, tea, edible oil, domestic LPG, economy class air travel, transport services, and small restaurants.
- 12% GST: Standard goods and services including processed foods, business class air travel, movie tickets under Rs 100, and work contracts.
- 18% GST: The most common slab covering a wide range of goods and services including most electronic items, restaurants in hotels, IT services, financial services, and telecom services.
- 28% GST: Luxury and demerit goods such as automobiles, cement, air conditioners, pan masala, aerated drinks, and movie tickets above Rs 100.
Common Items and Their GST Rates
Everyday Essentials (0% - 5%)
- Fresh milk, curd, and lassi: 0%
- Rice, wheat, and flour: 0% (unbranded) or 5% (branded and packaged)
- Sugar and jaggery: 5%
- Tea and coffee (not instant): 5%
- Medicines and drugs: 5% (most) or 12% (some)
- Cooking oil and ghee: 5%
Mid-Range Items (12% - 18%)
- Mobile phones and accessories: 18%
- Computers and laptops: 18%
- Restaurants (non-AC without ITC): 5%, AC restaurants: 5% (without ITC)
- Hotels (room tariff Rs 1,001 to Rs 7,500): 12%
- Hotels (room tariff above Rs 7,500): 18%
- Insurance premiums: 18%
Luxury and Premium Items (28%)
- Automobiles (cars, SUVs): 28% + Cess
- Air conditioners and refrigerators: 28%
- Cement and paint: 28%
- Aerated drinks: 28% + 12% Cess
- Tobacco products: 28% + Cess
Understanding Input Tax Credit (ITC)
One of the most important features of GST is the Input Tax Credit mechanism. If you are a registered business, you can claim credit for the GST you pay on purchases (inputs) against the GST you collect on sales (output). This prevents the cascading effect of tax-on-tax that existed in the pre-GST era.
- ITC can be claimed only if you have a valid tax invoice.
- The supplier must have filed their GST return.
- You must have received the goods or services.
- ITC cannot be claimed on certain items like food and beverages, personal vehicles, and goods used for personal consumption.
GST Composition Scheme
Small businesses with turnover up to Rs 1.5 crore (Rs 75 lakh for special category states) can opt for the Composition Scheme. Under this scheme:
- Manufacturers and traders pay GST at just 1% of turnover.
- Restaurants pay 5% of turnover.
- Service providers pay 6% of turnover (up to Rs 50 lakh).
- Filing is quarterly instead of monthly, reducing compliance burden.
- However, composition dealers cannot charge GST to customers or claim ITC.
How to Calculate GST
Calculating GST is straightforward:
- GST Amount = Base Price x GST Rate / 100
- Price with GST = Base Price + GST Amount
- For inter-state sales: IGST applies at the full rate.
- For intra-state sales: CGST and SGST apply at half the rate each.
For example, if you sell a product at Rs 10,000 with 18% GST within your state, the buyer pays Rs 11,800 (Rs 900 CGST + Rs 900 SGST). For inter-state sales, it would be Rs 1,800 IGST.
Use our free GST Calculator to quickly compute GST amounts for any rate slab. You can calculate both inclusive and exclusive GST with a detailed breakdown of CGST, SGST, and IGST components. It is perfect for business invoicing, quotations, and quick price checks.
Stay Updated
GST rates are reviewed periodically by the GST Council. Items may be moved between slabs based on revenue considerations and policy objectives. Always check the latest rates before filing returns or raising invoices. Bookmark our GST Calculator for quick access to accurate GST computations.