GST Rates 2025: Complete List for Goods and Services Explained
The Goods and Services Tax (GST) is a comprehensive tax system that has simplified indirect taxation in India. Each year, the GST Council reviews and revises tax rates to align with economic policies and market demands. Here’s a detailed breakdown of the GST rates for goods and services in 2025.
What is GST?
GST is a value-added tax levied on the supply of goods and services. It is divided into four major slabs to ensure uniformity while considering the affordability of essential and luxury items.
GST Rate Slabs for 2025
GST rates are categorized into four slabs: 5%, 12%, 18%, and 28%, with specific exemptions for essential items.
Goods Taxed at 0% (Exempt Items):
- Fresh fruits, vegetables, milk, curd, and other unprocessed food items
- Education and healthcare services
- Books and newspapers
5% GST Slab (Essential Items):
- Edible oils and packaged food items
- Medicines, including life-saving drugs
- Transportation services (e.g., railways and air travel in economy class)
12% GST Slab (Intermediate Goods):
- Processed food and beverages
- Sewing machines and fertilizers
- Hotel stays with a tariff between ₹1,000 and ₹7,500
18% GST Slab (Standard Goods & Services):
- Most goods, including soaps, toothpaste, and computers
- Restaurant services (non-AC)
- Software services
28% GST Slab (Luxury and Sin Goods):
- Luxury cars, tobacco, and aerated drinks
- Hotel stays with tariffs above ₹7,500
- Personal care items like perfumes
Updates for 2025
The GST Council has proposed revisions for 2025 to boost the economy:
- Reduction in GST for electric vehicles from 12% to 5% to encourage eco-friendly alternatives.
- Revised rates for textile and apparel to support the manufacturing sector.
How GST Rates Impact Businesses and Consumers
Understanding GST rates is crucial for businesses to maintain compliance and optimize pricing strategies. For consumers, knowing GST rates helps make informed purchasing decisions.