New GST Rates (GST 2.0) Explained With Examples
By Betsan · Updated 15 October 2026 · 5 min read
From 22 September 2025, GST in India moved to a simpler structure, often called GST 2.0: two main slabs of 5% and 18%, and a 40% rate for luxury and "sin" goods. This guide explains the changes and shows how to calculate GST with examples. Rates checked on 15 October 2026.
Open GST Calculator →Add or remove GST with CGST, SGST and IGST. Free, files stay on your device.The new GST slabs
| Rate | What it covers (examples) |
|---|---|
| 0% (exempt) | Fresh milk, paneer, bread, fresh fruit and vegetables, individual health and life insurance |
| 5% | Butter, ghee, packaged snacks, soap, shampoo, toothpaste, most medicines, hotel rooms up to ₹7,500 a night |
| 18% | Most other goods and services: electronics, small cars, cement, AC and TV, most professional services |
| 40% | Pan masala, sugary and aerated drinks, larger cars and SUVs, motorcycles above 350cc, yachts and private aircraft |
| 3% and 0.25% | Gold, silver and jewellery (3%); rough diamonds (0.25%) |
Most items that were at 12% moved to 5%, and most at 28% moved to 18%. Check the exact rate for your HSN or SAC code on cbic-gst.gov.in.
How to add GST to a price
GST = price × rate ÷ 100. Example: a service of ₹2,500 at 18% has ₹450 GST, so the invoice total is ₹2,950. Within the same state, the ₹450 is split into ₹225 CGST and ₹225 SGST. For a buyer in another state it is charged as ₹450 IGST.
How to remove GST from an inclusive price
Price before GST = total × 100 ÷ (100 + rate). Example: ₹5,900 including 18% GST gives ₹5,900 × 100 ÷ 118 = ₹5,000, so the GST is ₹900 (₹450 CGST + ₹450 SGST). A common mistake is to take 18% of ₹5,900, which gives ₹1,062 and is wrong.
Old invoices
Invoices dated before 22 September 2025 keep the rates that applied then, including 12% and 28%. In the GST Calculator, use "Other" to enter these rates.
Frequently asked questions
Is 12% GST completely removed?
For most goods, yes: they moved to 5%. A few items and transitional cases differ, so check your HSN code. The GST Calculator includes all current rates and lets you type any other rate.
What replaced the compensation cess?
For luxury and sin goods, the earlier 28% plus compensation cess was largely replaced by the single 40% rate. Some tobacco products have separate arrangements; check the latest notifications.
Tools used in this guide
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