GST rate slabs
Topic: Taxation: Direct and Indirect Taxes, GST and Global Tax Issues · NCERT: Class 12, Ch 5 "Government Budget and the Economy"
Meaning
GST rate slabs are the fixed rates at which goods and services are taxed under GST. In 2017 the main slabs were 0, 5, 12, 18 and 28%, with a compensation cess added on top of 28% for sin and luxury goods. The 56th GST Council (3 September 2025) simplified this to two main slabs from 22 September 2025: 5% (merit, for common-use items) and 18% (standard). A special 40% rate applies to sin and luxury goods. There is also a nil rate, plus special rates of 3% for gold and 0.25% for rough diamonds. Alcohol for human consumption and five petroleum products stay outside GST.
Example
Pan masala, tobacco, aerated drinks and large cars now fall in the 40% slab. GST on coal rose from 5% to 18%, and its ₹400/tonne compensation cess was removed.
Don't confuse with
- NCERT's "6 standard rates" (0, 3, 5, 12, 18, 28%): this list is out of date after the 2025 reform.
- Petroleum "outside GST": petroleum is in the GST law, but the Council has not yet notified a date to start taxing it.