The big gst rate changes came from the 56th GST Council meeting on 3 September, which replaced the old 5%, 12%, 18% and 28% slabs with two main rates of 5% and 18%, plus 40% for a short list of demerit and luxury goods. The new rates took effect on 22 September through notification 9/2025-Central Tax (Rate) for goods, 10/2025 for nil rated goods and 15/2025 for services.
Tobacco and pan masala followed later: from 1 February of the next year they moved to 40% (biris 18%) with compensation cess at nil. This page sets out the dates, the notifications and the main items that moved, and how to handle invoices around a change date. Every current slab is set out in the GST rate list.
GST rate changes: codes and GST rates
Item / HSN / GST- Cement18%Was 28%
- Air conditioners and televisions18%Were 28%
- Small cars, bikes up to 350 cc18%Were 28% plus cess
- Bigger cars, bikes above 350 cc40%Were 28% plus cess
- Medicines5%Mostly 12% before
- Butter, ghee, cheese, namkeen5%Were 12%
- Biscuits, chocolates, ice cream5%Were 18%
- Soap bars, shampoo, toothpaste5%Were 18%
- Aerated and sweetened drinks40%Were 28% plus cess
- Individual health and life insuranceExemptWas 18%
- Hotel rooms up to Rs 7,500 a day5% (no ITC)Was 12%
- Salons, gyms, yoga5% (no ITC)Were 18%
- Cigarettes and pan masala (later change)40%Were 28% plus cess
Quick facts
Council meeting
56th meeting, 3 SeptemberEffective date
22 SeptemberGoods notifications
9/2025 (rates) and 10/2025 (nil)-Central Tax (Rate)Services notification
15/2025-Central Tax (Rate)Tobacco change
40% from 1 February of the next year, biris 18%New structure
5% and 18%, plus 40% for demerit goods
Gst rate change date and notifications
| Change | Date | Notification |
|---|---|---|
| Two-slab structure for goods | 22 September | 9/2025 and 10/2025-Central Tax (Rate) |
| Services rates revised | 22 September | 15/2025-Central Tax (Rate) and connected notifications |
| Tobacco and pan masala to 40%, biris 18% | 1 February of the next year | Later notifications |
| Compensation cess on most goods ended | 22 September | Cess notifications |
| Later entry changes (for example retreaded tractor tyres, app based delivery) | 1 November of the next year | Later amendment notifications |
State and union territory notifications with the same numbers were issued for SGST and UTGST, and integrated tax notifications for IGST.
Gst rate changes for common items
The reform moved most goods from 12% down to 5% and most goods from 28% down to 18%. Some items moved up: bigger cars, motorcycles above 350 cc and sweetened drinks went to 40%. Key changes:
- Construction: cement 28% to 18%. See cement.
- Vehicles: small cars and bikes up to 350 cc to 18%; bigger cars to 40%, with no compensation cess. See cars.
- Electronics: ACs, large TV sets, dishwashers, monitors and projectors 28% to 18%.
- Food: butter, ghee, cheese, namkeen, dry fruits 12% to 5%; biscuits, chocolates, ice cream 18% to 5%; UHT milk, paneer and Indian breads to nil.
- Personal care: soap bars, shampoo, hair oil, toothpaste and talc 18% to 5%.
- Health: most medicines and medical devices 12% to 5%; individual health and life insurance 18% to nil.
- Services: hotel rooms up to Rs 7,500 a day 12% to 5% without credit; salons and gyms 18% to 5% without credit.
Gst rate change effective date: billing around the change
For goods and services supplied around a change date, the rate depends on the time of supply. The general rule in section 14 of the CGST Act looks at three events: when the goods or services were supplied, when the invoice was issued and when payment was received. Two of the three falling after the change usually means the new rate applies. Advances received before the change for supplies after it need care.
What businesses had to do
- Update item masters with the new rates from 22 September.
- Issue invoices after that date at the new rate.
- Correct invoices issued wrongly at the old rate with credit or debit notes.
- Use credit built up at the old rate against output tax at the new rate.
- Check whether price reductions were passed on, since consumer complaints were watched closely.
How to keep track of later changes
Rates are amended by fresh notifications after Council meetings. Use the GST rate finder and read the latest notifications on the GST portal before quoting a rate. Product pages on this site note changes that affect them, such as tobacco.
This summary of rate changes is general information based on the reform notifications and later changes reported here. Notifications continue to be amended, so read the current text on the GST portal and ask a GST practitioner or chartered accountant about invoices that straddle a change date.
Frequently asked questions
When did the new GST rates take effect?
The two-slab goods rates and revised services rates took effect on 22 September.
Which notification changed GST rates?
Goods rates are in notification 9/2025-Central Tax (Rate), nil rated goods in 10/2025, and services in 15/2025-Central Tax (Rate).
What are the new GST slabs?
Two main rates of 5% and 18%, a 40% rate for demerit goods, and special rates of 3%, 1.5% and 0.25% for precious metals and stones.
When did GST on cigarettes change to 40%?
From 1 February of the year after the reform, with compensation cess at nil.
Which rate applies to invoices around a change date?
It depends on the time of supply rules, which look at the dates of supply, invoice and payment.