GST 2.0 Item-Wise Breakdown

Comprehensive list of items in each GST 2.0 slab (Effective 22 Sept 2025)

Rate	Goods	Services
0%	Fresh fruits, vegetables, fresh milk, UHT milk, paneer, eggs, salt, unbranded cereals, roti/paratha/Indian breads, 33 life-saving drugs, exercise books, pencils, erasers	Health and life insurance (individual), education services, healthcare (in-patient), charitable activities
5%	Butter, ghee, cheese, packaged namkeen, biscuits, chocolates, tea, coffee, spices, most medicines, medical devices, hair oil, soap, shampoo, toothpaste, apparel/footwear up to ₹2,500, tractors, Electric Vehicles	Restaurant services (other than in hotels with room tariff >₹7,500) without ITC, hotel rooms up to ₹7,500/night without ITC, economy-class air travel, beauty/wellness services (salons, gyms, yoga) without ITC
18%	Industrial machinery, capital goods, cameras, AC, TVs, dishwashers, refrigerator, washing machine, cement, small cars (petrol ≤1200cc / diesel ≤1500cc and ≤4m length), motorcycles up to 350cc, auto parts, apparel above ₹2,500	Professional services (CA, legal services under forward charge), telecom, IT services, banking and financial services, hotel rooms above ₹7,500/night, restaurants in such hotels, most B2B services
40%	Mid-size and large cars (petrol >1200cc or diesel >1500cc or length >4m), SUVs, motorcycles above 350cc, yachts and aircraft for personal use, aerated / caffeinated / sugar-added beverages, pan masala, cigarettes and tobacco (from 1 Feb 2026)	Casinos, betting, gambling, horse racing, lottery, online money gaming, admission to IPL-type sporting events
0.25%	Rough diamonds (Surat industry support)	—
3%	Gold, silver (jewellery making charges additional 5%)	—
28% + Cess	Tobacco & pan masala — moved to 40% GST from 1 February 2026. Compensation cess discontinued on these goods; replaced by an additional excise duty on tobacco and a Health & National Security Cess on pan masala, both over and above GST. Bidis are at 18%.	—

What Changed on 22 September 2025 (GST 2.0)

12% slab eliminated: Items moved to 5% (dairy, personal care, medical devices) or 18% (textiles above ₹2,500, select services)
28% slab + cess restructured: Most 28% goods moved to 18%; luxury/sin goods to a clean 40% slab. Compensation cess removed except for tobacco and pan masala, which moved to 40% on 1 February 2026 (with a separate excise duty / Health & National Security Cess on top)
Insurance exempted: Individual health and life insurance moved to 0%
33 life-saving drugs: Moved to nil rate
Small cars: Sub-4m cars (petrol ≤1200cc, diesel ≤1500cc) and motorcycles up to 350cc shifted from 28% to 18%; bigger cars and motorcycles above 350cc go to 40% (no separate cess)
Composition rates UNCHANGED: 1% (trader/mfr), 5% (restaurant not serving alcohol), 6% (service)
Effective date: All changes from 22 September 2025

GST 2.0 FAQs

What's GST 2.0 and when did it become effective?

GST 2.0 refers to the major rate rationalisation approved at the 56th GST Council Meeting on 3 September 2025, with changes effective from 22 September 2025. The 12% and 28% slabs were abolished, simplified to: 0%, 5%, 18%, and a new 40% slab for luxury/sin goods. Compensation cess removed for most items (except tobacco till loan obligations cleared).

What if my transaction was BEFORE 22 Sept 2025?

Use the "Old GST" option in the era selector. Pre-22 September 2025 transactions follow 5-slab structure (0/5/12/18/28% + cess). Tax invoices and ITC reconciliation must match the rate applicable on the date of supply. For transitional cases (orders placed before but supplied after), apply the rate on date of issue of invoice or actual supply per Section 12-14 of CGST Act.

Are composition scheme rates same after GST 2.0?

YES — composition rates remain UNCHANGED: 1% (trader/manufacturer), 5% (restaurant not serving alcohol), 6% (service provider). Composition turnover thresholds also unchanged: ₹1.5 Cr for goods (₹75L in special category states), ₹50L for services (Section 10(2A)). The GST 2.0 reform was about main slabs, not composition.

What happened to compensation cess?

Compensation cess was a temporary mechanism (5 years post GST launch in 2017) to compensate states for revenue loss. With GST 2.0, cess is removed for most items. For tobacco and pan masala the transition completed on 1 February 2026 — compensation cess was discontinued and these goods moved to the 40% slab, with an additional excise duty on tobacco products and a Health & National Security Cess on pan masala layered on top of GST. Bidis are taxed at 18%. So the effective burden on these goods is GST 40% plus the applicable duty/cess — not GST alone.

Should I update my ERP/invoicing system?

YES, urgently if you bill items affected by GST 2.0. Update: (1) HSN/SAC master with new rates from 22 Sept 2025, (2) ITC reconciliation logic, (3) GSTR-1 line items for new categories, (4) Customer invoices showing 40% (not 28%+cess) where applicable. Most accounting software (Tally, BUSY, Zoho) released updates around Sept 2025.

How does GST 2.0 affect ITC eligibility?

ITC rules unchanged structurally, but rate-wise: (1) ITC on purchases at OLD rates (before 22 Sept) flows normally, (2) ITC on purchases at NEW rates flows at new rates, (3) Inverted duty refund situations may change — items previously at 12% with 18% output now at 5% with 18% output have larger inverted duty pool. Review your input-output rate matrix.

What's the GST registration threshold in 2026?

UNCHANGED by GST 2.0: Services: ₹20 lakh (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura). Goods only: ₹40 lakh in most states; ₹20 lakh or ₹10 lakh in the few states that did not adopt the higher limit (₹10 lakh in Manipur, Mizoram, Nagaland, Tripura) — check your state's notification. Mandatory regardless of turnover: inter-state suppliers, e-commerce operators, reverse charge cases, casual taxable persons, non-resident taxable persons.

GST Calculator (GST 2.0 — 4 Slabs)

GST Calculation

GST 2.0 Calculator

GST 2.0 Item-Wise Breakdown

What Changed on 22 September 2025 (GST 2.0)

GST 2.0 FAQs

Running a business? Get a CFO view of your money.

Prabhakar Kumar

GST Calculator (GST 2.0 — 4 Slabs)

GST Calculation

GST 2.0 Calculator

GST 2.0 Item-Wise Breakdown

What Changed on 22 September 2025 (GST 2.0)

GST 2.0 FAQs

Running a business? Get a CFO view of your money.

Continue with these calculators

Prabhakar Kumar