On 22 September 2025, India moved to what is widely called GST 2.0. The old 12% and 28% slabs were folded into a simpler structure, and hundreds of everyday goods changed rate overnight. If your item master still carries the old rates, every bill you print is wrong. This new GST rates list covers the items Indian shops sell most, with the rate before and after the change, so you can check your stock line by line.
Rates below are from Notification 9/2025-Central Tax (Rate) and 10/2025-Central Tax (Rate), effective 22 September 2025, as amended up to October 2026. Rates depend on the exact HSN code and description, so confirm borderline items with your CA.
The GST Slab Rates in 2025-26
- 0% (nil): essentials such as fresh milk, UHT milk, paneer, bread, roti, khakhra, books and sanitary pads.
- 5% (merit rate): most packaged food, daily personal care, apparel and footwear up to ₹2,500, most medicines, bicycles and many household goods.
- 18% (standard rate): electronics, appliances, cement, paints, hardware, and anything not listed elsewhere.
- 40% (demerit rate): a short list of sin and luxury goods, including pan masala, cigarettes and most tobacco products (from 1 February 2026), aerated and caffeinated drinks, larger cars and motorcycles above 350 cc.
- 3% and 0.25% stay as special rates for gold, silver, jewellery and precious stones.
Everyday Items That Got Cheaper
| Item | HSN | Before 22 Sept 2025 | Now |
|---|---|---|---|
| Paneer (pre-packed) | 0406 | 5% | 0% |
| UHT milk | 0401 | 5% | 0% |
| Butter, ghee | 0405 | 12% | 5% |
| Namkeen, bhujia | 2106 | 12% | 5% |
| Pasta, noodles | 1902 | 12% | 5% |
| Biscuits, cakes, pastries | 1905 | 18% | 5% |
| Chocolate | 1806 | 18% | 5% |
| Toothpaste, toothbrush | 3306, 9603 | 18% | 5% |
| Toilet soap (bar), shampoo, hair oil | 3401, 3305 | 18% | 5% |
| Steel kitchen utensils | 7323 | 12% | 5% |
| Bicycles | 8712 | 12% | 5% |
| Air conditioners | 8415 | 28% | 18% |
| Televisions above 32 inches | 8528 | 28% | 18% |
| Dishwashers | 8422 | 28% | 18% |
| Cement | 2523 | 28% | 18% |
GST Rates for Common Shop Items Now
These items either did not change or are worth confirming because shops often carry the wrong rate:
| Category | Items | GST now |
|---|---|---|
| Groceries | Sugar, edible oils, tea, roasted coffee, jam, sauces, packaged mineral water | 5% |
| Groceries | Fresh milk, bread, sanitary pads | 0% |
| Personal care | Diapers, combs, agarbatti, candles | 5% |
| Medical | Most medicines, bandages, spectacles and lenses | 5% (some life-saving drugs 0%) |
| Clothing and footwear | Up to ₹2,500 per piece or pair / above ₹2,500 | 5% / 18% |
| Electronics | Mobile phones, laptops, chargers, batteries | 18% |
| Appliances | Refrigerators, washing machines, mixers, irons, fans | 18% |
| Hardware | Taps, valves, switches, wires, paints | 18% |
| Furniture | Wooden and metal furniture / bamboo and cane furniture | 18% / 5% |
| Jewellery | Gold, silver, jewellery | 3% |
| Services | Restaurants outside high-tariff hotels, salons | 5% without input tax credit |
Watch the split headings
Some HSN headings now carry two rates depending on the exact product. Cheese is 5% but paneer is 0%, though both sit under heading 0406. Car tyres are 18% but bicycle tyres are 5%. Phone chargers are 18%, but the same tariff line used for EV chargers is 5%. When an item sits in a split heading, pick the rate from the product, not the first four digits of the code.
What the Rate Cut Means at the Counter
For a product with a taxable value of ₹100, the price with 18% GST was ₹118. At 5% it is ₹105, so the customer pays ₹13 less, about 11%. That only reaches the customer if you update the rate in your system. A shop still billing biscuits at 18% is overcharging tax, and that excess still has to be paid to the government.
Old stock with old MRPs
Stock bought before 22 September 2025 may carry an MRP that included the old rate. The new rate applies to every sale made on or after that date, whatever the label says. Selling above the printed MRP is never allowed, so if the new rate lowers the tax, charge the new rate and either pass the saving on or keep the shelf price within the MRP.
How to Update GST Rates in Your Billing Software
- Export your item list and sort it by HSN code.
- Check each code against the tables above or the notification.
- Update the tax rate on each item. Most software lets you edit items in bulk.
- Bill a test item and check the tax line on the printed bill.
In Billux, the item form suggests a GST rate as soon as you type the HSN code, using a table checked against the September 2025 notifications. For split headings like the ones above it does not guess. It asks you to choose. For clothing and footwear it looks at the price, because of the ₹2,500 rule explained in our guide to GST on clothes and footwear.
Running a grocery or general store? See how Billux handles a retail and kirana counter or a supermarket, and read our GST invoice format guide to check your printed bills.
Services and Composition Dealers
Shops that also bill services should check those rates too, as of the September 2025 change:
- Restaurants: 5% without input tax credit. Restaurants inside hotels where a room is charged above ₹7,500 a night pay 18% with credit.
- Salons and beauty parlours: 5% without input tax credit.
- Repairs and maintenance, such as phone or appliance repair: 18%.
- Professional and IT services: 18%.
If you are a composition dealer, the slab changes do not alter the flat rate you pay on turnover (1% for traders and manufacturers, 5% for restaurants). You still issue a Bill of Supply without tax, as explained in our composition scheme guide.
For rates and billing tips specific to your trade, see our guides for bakeries and sweet shops, mobile phone shops and jewellery shops.
The Bottom Line
GST 2.0 made the slabs simpler: 0, 5, 18 and 40, plus the special jewellery rates. Most daily-use goods are now 5%, and most durables are 18%. Spend an hour checking your item master against this list. It is the cheapest compliance work you will do this year.
Frequently Asked Questions
What are the new GST slab rates?
From 22 September 2025 the main GST rates are 0%, 5%, 18% and a 40% rate for sin and luxury goods. The 12% and 28% slabs were removed. Special rates of 3% and 0.25% continue for gold, jewellery and precious stones.
When did the new GST rates come into effect?
The new rates took effect on 22 September 2025 under Notification 9/2025 and 10/2025-Central Tax (Rate). Tobacco products and pan masala moved to 40% from 1 February 2026.
What is the GST rate on biscuits now?
Biscuits, cakes and pastries are 5% GST from 22 September 2025, down from 18%. Plain bread is 0%.
Which items are in the 40% GST slab?
The 40% slab covers pan masala, cigarettes and most tobacco products, aerated and caffeinated sugary drinks, larger cars and motorcycles above 350 cc, and a few other luxury goods.
Is GST on mobile phones reduced?
No. Mobile phones stayed at 18% GST after the September 2025 change.
Do I have to change MRP on old stock after the GST rate change?
The new GST rate applies to every sale from 22 September 2025, whatever the printed label says. You must never sell above the printed MRP. When the tax went down, charge the new lower rate.
