The structure since 22 Sep 2025
The 56th GST Council met on 3 Sep 2025 and recommended “a 2 rate structure with a Standard Rate of 18% and a Merit Rate of 5%; a special de-merit rate of 40%” (PIB release, copy on gstcouncil.gov.in). The new goods rates came in through Notification 9/2025-Central Tax (Rate) from 22 Sep 2025.
| Rate (CGST + SGST, or IGST) | What it covers |
|---|---|
| Nil or exempt | Many unprocessed foods, and some items moved to nil in 2025, such as UHT milk, pre-packaged paneer, and chapati and roti |
| 0.25% | Rough or simply sawn diamonds and some precious stones |
| 1.5% | Some other diamonds, as listed |
| 3% | Gold, silver, pearls and jewellery |
| 5% | The “merit” rate: many daily-use goods and some services |
| 18% | The standard rate for most goods and services |
| 40% | The “de-merit” rate: a select few goods and services, such as larger cars and motorcycles above 350 cc, and from 1 Feb 2026 pan masala and tobacco products |
Inside a state, split the rate half and half: 18% is 9% CGST + 9% SGST. Across states, charge the full rate as IGST. See place of supply.
Examples of what moved on 22 Sep 2025
All from the 56th Council release.
| Item | Before | From 22 Sep 2025 |
|---|---|---|
| Air conditioners, TVs above 32 inches, dishwashers | 28% | 18% |
| Small cars (petrol, LPG or CNG up to 1,200 cc and 4,000 mm) | 28% | 18% |
| Motorcycles up to 350 cc | 28% | 18% |
| Cement | 28% | 18% |
| Ghee, butter, cheese | 12% | 5% |
| Namkeen, bhujia, sauces, pasta, chocolates, coffee | 12% or 18% | 5% |
| Hair oil, shampoo, toothpaste, toilet soap bars, toothbrushes, bicycles | 12% or 18% | 5% |
| Tractors and many farm machines | 12% | 5% |
| Hotel rooms up to ₹7,500 a night | 12% with credit | 5% without credit |
| Gyms, salons, barbers, yoga | 18% with credit | 5% without credit |
| Individual life and health insurance | 18% | Exempt |
| Air travel other than economy | 12% | 18% |
| Coal | 5% | 18% |
Worked example. A dealer sells a 43-inch television for ₹40,000 before tax.
- Before 22 Sep 2025, at 28%: ₹40,000 + ₹11,200 = ₹51,200.
- From 22 Sep 2025, at 18%: ₹40,000 + ₹7,200 = ₹47,200.
- Inside Karnataka that ₹7,200 is ₹3,600 CGST + ₹3,600 SGST.
Changes in 2026, up to 1 Nov 2026
| From | Change | Notification |
|---|---|---|
| 1 Feb 2026 | Pan masala, cigarettes and other tobacco products move to the 40% schedule; biris to 18%; the old 28% schedule is omitted | 19/2025-Central Tax (Rate), 31 Dec 2025 |
| 1 May 2026 | Tariff codes listed against some beverages under heading 2202 replaced in the 5% and 40% entries; the rates of those entries stay the same | 01/2026-Central Tax (Rate), 30 Apr 2026 |
| 1 Nov 2026 | Retreaded tractor tyres to 5%, in line with new tractor tyres | 02/2026-Central Tax (Rate) |
| 1 Nov 2026 | Delivery services supplied through an e-commerce operator by suppliers not liable to register, and delivery of goods sold through an e-commerce operator, at 5% without credit | 06/2026-Central Tax (Rate) |
| 1 Nov 2026 | An optional 5% rate, with limited same-line credit, for passenger transport and renting of electric vehicles where battery charging is in the price | 06/2026-Central Tax (Rate) |
| 1 Nov 2026 | Hotels up to ₹7,500 a night, restaurants (other than at specified premises) and outdoor caterers may take credit on input services from the same line of business; for hotels and caterers it is capped at tax at the 5% rate | 06/2026-Central Tax (Rate) |
Other 1 Nov 2026 notifications made narrower changes, such as nil GST on psyllium (isabgol) seeds (Notification 03/2026-Central Tax (Rate)) and new service exemptions (Notification 07/2026-Central Tax (Rate)). The 57th GST Council met on 8 Oct 2026. Its other recommendations take effect only when notified. Check the current notification before you change a rate. The GST updates log lists each change with its date.
How MyRecords helps
- Rates are set per item through tax templates, so one change updates every new invoice for those items.
- HSN and SAC codes on each item, printed on the tax invoice and summarised in the HSN table of the GSTR-1 file. With the AI Assistant on, Suggest HSN (AI) offers codes from the official list for you to pick.
- Statutory updates are part of every AMC plan listed on the support and AMC page.
- Old invoices keep the rate they were made with, so your returns for past periods do not change.
Look up a code with the HSN/SAC finder or work out tax with the GST calculator.