GST Rate
GST Rate
A GST rate is the percentage at which Goods and Services Tax is applied to the value of a supply — the sale of goods, provision of services, or import of goods into India. The rate determines how much GST a seller must charge on an invoice and how much the buyer ultimately pays. GST rates in India are decided by the GST Council, a joint body of the central and state governments, and are notified through official gazette notifications by the Central Board of Indirect Taxes and Customs (CBIC).
For businesses and freelancers raising invoices, the GST rate is not optional — it is a legally prescribed percentage tied to the nature of the goods or services being supplied. Charging the wrong rate is a compliance error that can expose the supplier to penalties and prevent the buyer from claiming Input Tax Credit (ITC). Knowing the correct GST rate for your product or service, and displaying it correctly on your invoice, is a basic requirement of GST compliance.
Quick reference
| GST rate slabs in India (2026) | 0%, 5%, 18%, 40% |
| GST 2.0 reform effective date | 22nd September 2025 (announced by 56th GST Council on 3rd September 2025) |
| Old slabs removed by GST 2.0 | 12% and 28% slabs abolished |
| Rate on professional and IT services | 18% |
| Rate on essential goods and basic food items | 0% or 5% |
| Rate on gold and silver jewellery | 3% (plus 5% GST on making charges) |
| Rate on diamonds and precious stones | 0.25% |
| Rate on luxury and sin goods | 40% |
| Rate on export of services | 0% (zero-rated) |
| Who decides GST rates | GST Council (Centre + all states) |
| Official rate lookup tool | GST portal HSN/SAC search at services.gst.gov.in |
| CGST + SGST split on intra-state transactions | Each equals half the total GST rate (e.g. 9% + 9% = 18%) |
GST 2.0: the rate structure in 2026
India's GST rate structure was significantly simplified by the 56th GST Council meeting (September 3, 2025), which implemented a reform package referred to as GST 2.0. The key change was the abolition of the 12% and 28% tax slabs.
Before GST 2.0 (pre-September 2025)
| Slab | Coverage |
|---|---|
| 0% | Essential goods and services |
| 5% | Merit goods — basic food, medicines |
| 12% | Standard goods — computers, processed food |
| 18% | Most manufactured goods and services |
| 28% | Luxury and sin goods |
After GST 2.0 (from 22nd September 2025)
| Slab | Coverage |
|---|---|
| 0% | Essential goods and services |
| 5% | Essential and merit goods — broader coverage than before |
| 18% | Most goods and all professional/IT services |
| 40% | Luxury and sin goods — replaces 28% + cess |
What moved where
- Almost 99% of items in the old 12% slab moved to 5% — making packaged food, medicines, life insurance, and many consumer goods cheaper.
- 90% of items in the old 28% slab moved to 18% — making white goods (fridges, ACs, washing machines), small vehicles, and auto parts cheaper.
- Luxury and sin goods (high-end SUVs, yachts, tobacco, aerated drinks, private jets, bikes above 350cc) moved from 28% + cess to a flat 40%.
For freelancers and service providers: Professional and IT services remained at 18% throughout. GST 2.0 did not change the rate applicable to the majority of JetInvoice users.
The four GST rate slabs explained
0% — Nil rated
Zero GST. No tax is charged by the supplier and the buyer pays no GST on these supplies.
Common examples:
- Fresh fruits and vegetables
- Unprocessed and unpackaged foodgrains (rice, wheat, pulses)
- Fresh milk and eggs
- Educational services (school and college tuition)
- Healthcare services by hospitals and authorised medical practitioners
- Books, newspapers, and printed maps
- Hotels and lodges charging under ₹1,00,000 per night
5% — Essential and merit rate
Charged on goods and services considered necessary but not completely exempt.
Common examples:
- Packaged foods (edible oil, sugar, tea, coffee, spices, butter, cheese)
- Medicines and pharmaceutical products
- Transport services (rail, economy class air travel)
- Life and health insurance premiums
- Restaurants (non-AC, non-alcohol serving)
- Footwear priced under ₹1,000
- Fertilisers and agricultural equipment
18% — Standard rate
The most widely applicable rate, covering most manufactured goods and virtually all professional and commercial services.
Common examples — services:
| Service type | GST rate |
|---|---|
| IT development and software services | 18% |
| IT consulting and support | 18% |
| Graphic design and UI/UX design | 18% |
| Content writing and copywriting | 18% |
| Digital marketing and SEO | 18% |
| Management consulting | 18% |
| Business consulting | 18% |
| Legal services | 18% |
| Accounting and CA services | 18% |
| Architecture and interior design | 18% |
| Engineering consultancy | 18% |
| Advertising agencies | 18% |
| Event management | 18% |
| Security services | 18% |
| AC restaurants | 18% |
| Hotels ₹1,001–₹7,500 per night | 12% (exception — stayed at old rate) |
Common examples — goods:
| Good | GST rate |
|---|---|
| Mobile phones and accessories | 18% |
| Laptops and computers | 18% |
| Televisions (up to 32 inches) | 18% |
| Air conditioners | 18% |
| Refrigerators and washing machines | 18% |
| Cameras | 18% |
| Bicycles (above ₹1,500) | 18% |
| Motorcycles (up to 350cc) | 18% |
| Cement | 18% |
| Paints and varnishes | 18% |
40% — Luxury and sin goods rate
The highest rate, applied to non-essential luxury items and goods considered harmful to health or society.
Common examples:
- Cigarettes, cigars, and tobacco products
- Pan masala
- Aerated drinks and sweetened beverages
- Motorcycles above 350cc
- High-end SUVs and luxury cars
- Yachts and private jets
- Casinos, gambling, and horse racing
Special rates
A few categories sit outside the four main slabs:
| Category | GST rate |
|---|---|
| Gold bars, coins, and bullion | 3% |
| Gold jewellery | 3% + 5% on making charges |
| Silver jewellery | 3% |
| Diamonds (rough) | 0.25% |
| Cut and polished diamonds | 1.5% |
| Rough precious and semi-precious stones | 0.25% |
GST rates on services: the complete picture for professionals
For freelancers, consultants, and service businesses that use JetInvoice, the most relevant rate is 18%. Here is a comprehensive breakdown of service GST rates:
Services taxed at 18% (most professional services)
- All IT and software services (development, consulting, SaaS, hosting, maintenance)
- All consulting services (management, strategy, HR, finance, marketing)
- All design services (graphic, product, UI/UX, interior, fashion)
- All legal services (advocates, legal consultants)
- All accounting and financial services (CAs, auditors, bookkeepers)
- All advertising and marketing services (agencies, SEO, PPC, social media)
- Translation and interpretation services
- Recruitment and staffing services
- Security services
- Photography and videography (commercial)
Services taxed at 5%
- Transport of passengers by air (economy class)
- Transport of goods by rail
- Supply of food and beverages in non-AC restaurants
- Specified healthcare-related services (non-exempt)
- Life and health insurance services
Services taxed at 0% (exempt)
- Healthcare services by hospitals and clinics
- Educational services by recognised institutions (schools, colleges)
- Residential rental services
- Services by RBI, IRDAI, SEBI
- Funeral, burial, and cremation services
Zero-rated (0% GST with eligibility to claim ITC refund)
- Export of services to foreign clients (when payment received in foreign currency)
- Supplies to Special Economic Zones (SEZ) and SEZ developers
Zero-rated is different from exempt. A zero-rated supply has 0% GST but the supplier can claim ITC on their inputs. An exempt supply has 0% GST but the supplier cannot claim ITC. For Indian freelancers invoicing foreign clients, exports are zero-rated — meaning they can claim refunds on GST paid for their business inputs.
How the GST rate appears on your invoice
The GST rate is not just written once on an invoice — it must be broken down correctly depending on whether the transaction is intra-state or inter-state.
Intra-state invoice (buyer and seller in same state)
When a Bengaluru freelancer invoices a Bengaluru client at 18% GST:
| Line item | Amount |
|---|---|
| Professional services | ₹1,00,000 |
| CGST @ 9% | ₹9,000 |
| SGST @ 9% | ₹9,000 |
| Total | ₹1,18,000 |
Inter-state invoice (buyer and seller in different states)
When the same freelancer in Bengaluru invoices a Delhi client at 18% GST:
| Line item | Amount |
|---|---|
| Professional services | ₹1,00,000 |
| IGST @ 18% | ₹18,000 |
| Total | ₹1,18,000 |
The tax amount paid by the client is identical (₹18,000). The difference is only in how the tax is labelled and to whom it is deposited.
Zero-rated export invoice
When the same freelancer invoices a US client:
| Line item | Amount |
|---|---|
| Professional services | USD 1,200 |
| GST | 0% (Zero-rated export — LUT filed) |
| Total | USD 1,200 |
How to find the correct GST rate for your goods or service
Before you put a rate on your invoice, you must be certain it is correct. Here are the three best methods:
Method 1 — GST portal HSN/SAC search (official)
Go to services.gst.gov.in/services/searchhsnsac. You can search by product/service name or by HSN/SAC code without logging in. The portal returns the official rate as notified by CBIC.
Method 2 — CBIC rate schedule
The CBIC publishes official rate schedules for goods (under CGST Rate Notification) and services (under the Services Rate Notification) at cbic-gst.gov.in. These are the primary legal documents for rate verification.
Method 3 — Third-party GST rate finders
Platforms like ClearTax, Razorpay, and EZTax maintain updated HSN/SAC rate lookup tools. Useful for quick reference, but always cross-check against the official CBIC schedules for high-value or unusual items.
If you cannot find the right rate, consult a CA before raising the invoice. Charging 5% when 18% applies means you have under-collected GST — and you are still liable to pay the correct amount to the government from your own pocket.
GST rate vs exempt vs nil-rated vs zero-rated
These four terms are frequently confused. They each have different compliance implications:
| Category | GST charged | ITC on inputs available | Example |
|---|---|---|---|
| Taxable (5%, 18%, 40%) | Yes — at specified rate | Yes | IT services at 18% |
| Nil-rated (0%) | No | No | Fresh vegetables |
| Exempt | No | No | Healthcare services |
| Zero-rated | 0% (with LUT) or 0% (with IGST refund) | Yes — refund available | Export of services to foreign clients |
The practical difference: a nil-rated or exempt supplier cannot claim ITC on their business purchases. A zero-rated exporter can — and can apply for a refund of ITC accumulated from business expenses.
Impact of wrong GST rate on your invoice
Applying the wrong GST rate — even unintentionally — creates problems for both you and your client.
If you charge a lower rate than required (e.g. 5% instead of 18%):
- You have under-collected GST from the client
- You are still legally required to pay 18% to the government
- The shortfall must come from your own pocket
- Your client may need to reverse their ITC claim and re-claim at the correct rate
If you charge a higher rate than required (e.g. 18% instead of 5%):
- You have over-collected GST from the client
- You must issue a credit note for the excess
- Your client's ITC claim may be affected
- The excess tax paid can be claimed as a refund, but this involves paperwork
Common mistakes with GST rates in India
Applying pre-GST 2.0 rates. Many businesses and invoice templates still reference 12% or 28% rates. These slabs were abolished in September 2025. Any invoice issued after 22nd September 2025 with a 12% or 28% rate is using an invalid rate.
Not distinguishing between nil-rated and zero-rated. A freelancer with foreign clients who treats their export income as "nil-rated" may not file an LUT, not report exports in GSTR-1, and forgo input tax credit refunds. Exports are zero-rated — not nil-rated.
Applying 18% GST to freight and transport charges on invoices. When transport charges are added to an invoice for goods, the GST rate on freight depends on the arrangement. Freight charged as part of a composite supply follows the rate of the principal supply.
Charging CGST + SGST on an inter-state invoice. If your client is in a different state from you, you must charge IGST — not CGST + SGST. The GST rate is the same, but the tax type is wrong. Your client cannot correctly claim ITC on a misclassified invoice.
Using a single GST rate for all items when invoice has multiple line items at different rates. If an invoice includes both goods and services with different applicable rates, each line item must show its individual rate. You cannot average them or use a single blended rate.
Frequently asked questions
What are the GST rates in India in 2026?
Following the GST 2.0 reform effective September 22, 2025, India has four main GST rate slabs: 0% for essential goods and services, 5% for essential and merit goods, 18% for most manufactured goods and all professional services, and 40% for luxury and sin goods. Special rates of 3% apply to gold and silver jewellery, and 0.25% to rough diamonds.
What is the GST rate on professional services in India?
All professional services in India are taxed at 18% GST. This includes IT development and consulting, graphic and product design, management consulting, legal services, accounting services, advertising and marketing, content writing, architecture, engineering consultancy, and any other service where a professional is being paid for their expertise or skill.
What is the GST rate on software services?
Software services including development, consulting, IT support, SaaS, cloud hosting, and maintenance are taxed at 18% GST in India. Packaged software sold on physical media (CDs, DVDs) is classified under HSN 8523 and is also taxed at 18%.
What changed in GST rates after GST 2.0?
The 56th GST Council (September 3, 2025) abolished the 12% slab — moving most items to 5% — and abolished the 28% slab, moving most items to 18% while introducing a 40% slab for luxury and sin goods. This simplified the rate structure from five slabs to four. Professional services were not affected and remain at 18%.
What is the GST rate on exports?
Exports of goods and services are zero-rated under GST — 0% tax is charged. This is different from nil-rated: a zero-rated exporter can claim Input Tax Credit on their business inputs. To export services at 0% GST, a freelancer must either file a Letter of Undertaking (LUT) with the GST portal and raise a zero-GST invoice, or pay 18% IGST and later claim a refund using Form RFD-01.
How do I find the GST rate for my product or service?
Search using the official GST portal's HSN/SAC lookup tool at services.gst.gov.in without needing to log in. Enter your product name or SAC/HSN code to get the official CBIC-notified rate. Alternatively, use CBIC's rate schedules at cbic-gst.gov.in. If unsure about a complex classification, consult a CA before invoicing.
What is the difference between nil-rated and zero-rated GST?
Both result in 0% tax charged to the customer, but they differ in Input Tax Credit eligibility. A nil-rated supply means the item is in the rate schedule at 0% — the supplier cannot claim ITC on their inputs. A zero-rated supply (export of goods or services to a foreign customer or SEZ) means 0% GST is charged, but the supplier can claim ITC on their inputs and apply for a refund.
Related terms
GST · CGST · SGST · IGST · HSN Code · SAC Code · Input Tax Credit · Tax Invoice · Zero-Rated Supply · Exempt Supply · GSTIN · Place of Supply
JetInvoice applies the correct GST rate automatically
When you create an invoice on JetInvoice, it detects whether your transaction is intra-state or inter-state based on your client's GSTIN and automatically applies the correct CGST + SGST or IGST split at the right rate. No manual rate lookup needed. Generate a fully compliant Tax Invoice PDF in under 2 minutes — free.