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GST in India: A Complete Guide to All Five Rate Slabs

GST (Goods and Services Tax) replaced a complex web of Central Excise, VAT, Service Tax, and a dozen other indirect taxes in July 2017. It's a destination-based tax, meaning tax is collected where goods or services are consumed. India runs a dual GST structure — CGST (Central GST) and SGST (State GST) — which are collected simultaneously at equal rates. For inter-state transactions, IGST (Integrated GST) applies.

The Five GST Rate Slabs

RateWhat's Covered
0%Essential food items (rice, wheat, milk, eggs, fresh vegetables, fruits), books, newspapers, healthcare services, education
5%Packaged food, tea, coffee, coal, fertilisers, economy hotels (room tariff under ₹7,500), economy-class air travel, transport services
12%Butter, ghee, fruit juices, mobile phones, business-class air travel, hotels (₹7,500–₹12,500), work contracts
18%Most services (telecom, IT services, banking, insurance, restaurants without alcohol licence), electronics, stationery, mineral water, ice cream, haircare products, luxury hotels (above ₹12,500)
28%Luxury/sin goods — cars, motorcycles, cement, tobacco, aerated drinks, casinos, online gaming, large consumer durables (ACs, dishwashers)

Beyond 28%, some goods attract an additional Compensation Cess — for example, cigarettes, luxury cars above ₹10L, and aerated drinks carry cess on top of the 28% GST.

CGST vs SGST vs IGST

When you buy something within your state (intra-state), the 18% GST is split as 9% CGST (goes to Central govt) + 9% SGST (goes to State govt). When buying across states (inter-state), the full 18% is collected as IGST and then apportioned. As a consumer, this split doesn't affect you — you pay the same percentage either way.

How to Add GST to a Price (Exclusive → Inclusive)

If you know the price before GST (base price) and want to find the final price including GST:

Formula: Final Price = Base Price × (1 + GST Rate/100)

Example: Laptop base price ₹50,000. GST rate 18%.

₹50,000 × (1 + 18/100) = ₹50,000 × 1.18 = ₹59,000

GST amount = ₹9,000 (CGST ₹4,500 + SGST ₹4,500)

How to Remove GST from a GST-Inclusive Price (Inclusive → Exclusive)

If a price already includes GST and you want to find the pre-GST base price or the GST component:

Formula: Base Price = Inclusive Price ÷ (1 + GST Rate/100)

Example: Restaurant bill ₹2,360 including 18% GST.

₹2,360 ÷ 1.18 = ₹2,000 (base price)

GST amount = ₹2,360 − ₹2,000 = ₹360

A common mistake: people incorrectly calculate 18% of ₹2,360 = ₹424.80. That gives a wrong answer — you must divide, not multiply.

Common GST Examples by Category

ItemGST Rate
Fresh vegetables, fruits0%
Branded packaged food5%
Restaurant (non-AC, no alcohol)5%
Restaurant (AC / full-service)18%
Smartphone18%
Laptop / Computer18%
Clothes (below ₹1,000)5%
Clothes (above ₹1,000)12%
Gold (jewellery)3%
Petrol, DieselNot under GST
Air conditioner28%
Car (above 4m, > 1500cc)28% + cess

GST on Real Estate

Under-construction properties attract 5% GST (1% for affordable housing, defined as price under ₹45L and carpet area under 60 sqm in metro / 90 sqm in non-metro). Completed, ready-to-move properties with a completion certificate do not attract GST — which is why developers hurry to get completion certificates before handing over.

Input Tax Credit (ITC)

Registered businesses can claim credit for GST they paid on inputs (raw materials, services) against the GST they collect from customers. This "input tax credit" prevents cascading taxation. As an end consumer, you don't claim ITC — you bear the full burden of GST. But businesses in the supply chain don't pay tax on the same value multiple times.

GST Registration Threshold

Businesses with annual turnover above ₹40 lakh (goods) or ₹20 lakh (services) must register for GST. In special category states (hilly, north-eastern), the threshold is ₹10 lakh. E-commerce operators must register regardless of turnover.

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Frequently Asked Questions

Is GST the same as VAT?
GST replaced VAT (Value Added Tax) in India from July 2017. VAT was a state-level tax with different rates in every state. GST unified these into a single national framework with harmonised rates, though states still retain their share through SGST. Some items like petroleum, electricity, and alcohol for human consumption are still under VAT/state excise.
Why is petrol not under GST?
Petroleum products (petrol, diesel, natural gas, aviation turbine fuel, crude oil) and alcohol for human consumption are kept outside the GST framework. States and the Centre want to retain the ability to tax these items independently, as they are major revenue sources. This is also why pump prices vary significantly between states.
What is the Composition Scheme?
Small businesses with turnover up to ₹1.5 crore (₹75L for service providers) can opt for the Composition Scheme — they pay a flat GST rate (1–5% depending on type) and file returns quarterly instead of monthly. The trade-off: they cannot claim input tax credit and cannot collect GST from customers.
Can I get a refund of GST as a consumer?
Generally no — GST refunds for consumers aren't standard practice. Refunds go to registered businesses (exporters, inverted duty structure cases). However, if a vendor has overcharged GST on an exempt item and you can prove it, you can seek a refund directly from the seller.

Source: GST Council, cbic.gov.in. Rates current as of 2025. GST rates on specific goods and services are subject to revision by the GST Council. Not financial or tax advice.