Guide · Tax
GST slabs in India
Most everyday supplies sit in a few GST rate buckets. Here is how to think about them without memorising the entire tariff.
GST rates in India are grouped into slabs. You do not need the full tariff schedule to check a restaurant bill or draft a simple invoice — but you do need the correct rate for that specific supply. Wrong rate, wrong tax, and a GST return mismatch that takes hours to fix.
The slabs people see most
Nil or 0% covers certain essentials — fresh milk, unpacked food grains, some healthcare services, and educational supplies in specified cases. 5% appears on many daily items: packaged food staples, medicines, transport services, and some restaurant meals. 12% covers processed foods, business-class air tickets, and certain construction inputs. 18% is the default mental model for a lot of B2B services — IT consulting, professional fees, most restaurant bills with AC, and a wide band of manufactured goods. 28% applies to sin and luxury categories — premium cars, tobacco, aerated drinks — sometimes with compensation cess on top.
Exact classification depends on HSN (Harmonised System of Nomenclature) codes for goods and SAC (Services Accounting Code) for services, plus government notifications that change over time. Budget announcements can shift items between slabs overnight. When in doubt for business filing, check the rate from the GST portal tariff search or your CA — do not guess from a blog memory.
Bill example at 18%
Taxable value 10,000 exclusive of GST. GST at 18% = 1,800. Invoice total = 11,800.
For intra-state supply (seller and buyer in the same state), that 1,800 splits into CGST 900 + SGST 900. Inter-state supply usually shows IGST 1,800 instead — one line, same total tax, different split for the government's books.
Try the same numbers on the GST calculator in exclusive mode. Toggle the rate to 5% or 12% and watch how a wrong slab assumption changes the total by hundreds of rupees on a single invoice.
Bill example at 5%
A kirana store sells packaged atta worth 500 (taxable value). GST at 5% = 25. Total = 525. If the same shop sells a processed snack classified at 12%, a 200 item attracts 24 GST. Two items in one bag, two rates — read the invoice line by line.
MRP and inclusive stickers
Retail MRPs are often GST-inclusive. If a product shows 590 inclusive at 18%, the tax component is not 18% of 590. It is 590 × 18/118 ≈ 90. Net value ≈ 500. Inclusive mode on the calculator exists for exactly this reverse calculation.
Restaurant menus in metro cities usually show GST-inclusive prices for items above 7,500 threshold cases, but many mid-range restaurants still quote exclusive rates on the menu and add GST at the bottom. Check the bill footer before you mentally budget.
More detail: GST inclusive vs exclusive.
Restaurant and service sector quirks
Restaurant GST depends on whether the establishment has AC, whether it serves liquor, and turnover-based composition rules. A non-AC dhaba and a five-star hotel restaurant can charge different effective rates on what looks like the same dal tadka. The GSTIN on the bill and the SAC code tell the story — not the menu font.
Hotel room rent above certain thresholds attracts GST at 18% or higher slab rates depending on declared tariff. Always check the booking confirmation's tax breakup, not just the "per night" headline.
Why slabs confuse shoppers
Similar products can sit in different rates. Fresh fruit may be nil-rated; fruit juice is taxed. Unpacked rice may be exempt; branded packaged rice attracts 5%. A composition-scheme small retailer may not show a full GST breakup the way a regular taxpayer does — their bill looks simpler but the tax is embedded differently.
E-commerce invoices from Amazon, Flipkart, or Meesho can look busy with shipping lines taxed differently from the product line. Marketplace facilitators add another layer. Read line by line; do not assume one rate for the whole cart.
GST compensation cess
Some 28% slab items also attract compensation cess — luxury cars, tobacco, pan masala, aerated beverages. The cess is on top of the 28% GST. A car invoice showing "GST 28% + Cess 1%" means the effective rate is 29% on the taxable value. Our calculator handles the base GST rate; cess may need a separate line depending on the product.
For businesses
Rate errors create demand notices, credit mismatches in GSTR-2A/2B, and reconciliation headaches at year-end. Map every SKU and service to HSN/SAC, lock rates in your billing software (Tally, Zoho, ClearTax), and revisit when budgets change slabs. A single wrong rate on a high-volume SKU can mean lakhs in corrections over a year.
See GST for businesses and how GST is calculated. Calculator hub: GST calculator guide.
Checking rate changes after Budget
Every Union Budget can move items between slabs. Packaged paneer, footwear, and EV components have shifted rates in recent years. If you run a shop, subscribe to GST notification alerts or let your CA forward rate-change summaries. One missed notification can mean weeks of wrong billing.
Quick reference table (common supplies)
Unpackaged food grains: often nil. Packaged biscuits and snacks: often 12–18%. Mobile phones: 12% or 18% depending on notification. Two-wheelers: 28% plus cess in many cases. Domestic electricity and water: outside GST. Keeping a one-page cheat sheet for your business category saves Sunday-night invoice panic.
Disclaimer: Rates and classifications change with government notifications. This is a plain overview, not a tariff authority or tax advice. Confirm with official GST resources or a tax professional.