| Old Rate | Status in GST 2.0 | Moved To |
|---|---|---|
| 12% slab | ❌ Abolished | Items moved to either 5% or 18% |
| 28% slab | ❌ Abolished | Items moved to 18% or new 40% |
| 5% slab | ✅ Retained | Essential goods continue at 5% |
| 18% slab | ✅ Retained | Becomes the standard rate |
| 0% (exempt) | ✅ Retained | Basic food, healthcare, education exempt |
| Item | Before GST 2.0 | After GST 2.0 | Change |
|---|---|---|---|
| Packaged foods (12% items) | 12% | 5% or 18% | Many items cheaper |
| Electronics (laptops, phones) | 18% | 18% | No change |
| Restaurants (AC) | 18% | 18% | No change |
| Restaurants (non-AC) | 5% | 5% | No change |
| Luxury cars, tobacco | 28% | 40% | More expensive |
| Medicines & healthcare | 5–12% | 5% | Cheaper |
| Professional services (CA, lawyer) | 18% | 18% | No change |
| Restaurant Type | GST Rate | ITC Available? |
|---|---|---|
| Standalone restaurant (non-AC) | 5% | No |
| Standalone restaurant (AC) | 5% | No |
| Restaurant in hotel (room rate < ₹7,500/night) | 5% | No |
| Restaurant in hotel (room rate > ₹7,500/night) | 18% | Yes |
| Cloud kitchens / Zomato / Swiggy | 5% | No |
| Outdoor catering | 18% | Yes (if registered) |
Add or remove GST with updated 2.0 rates. Get CGST, SGST, IGST breakup instantly.
Open GST Calculator →The GST 2.0 reform, effective September 2025, simplified India's indirect tax system by eliminating the controversial 12% and 28% slabs. The new structure has just three main rates:
The 5% slab covers items of basic necessity: packaged food products, tea, coffee, edible oils, sugar, spices, kerosene, coal, medicines (life-saving drugs), transport services including railways and economy class air travel, and hotel rooms priced below ₹1,000 per night.
The 18% slab is now the standard rate covering most goods and services: electronics, appliances, most manufactured goods, restaurants (with AC), business class air travel, hotels above ₹7,500 per night, financial services, IT services, telecom services, and most consumer goods. This is the rate most Indian businesses deal with daily.
The 40% slab replaced the old 28% rate and applies exclusively to luxury and demerit goods: high-end automobiles, tobacco products, aerated drinks, pan masala, and other luxury items. The rationale is that those who can afford luxury goods can afford higher taxes, helping cross-subsidize essential goods at lower rates.
The old 12% slab (which covered items like processed food, medicines, mobile phones, textiles) has been eliminated. Items previously in the 12% bracket have been moved either to 5% (if essential) or 18% (standard goods). The 28% slab with its various cess charges has been replaced by the flat 40% luxury rate, simplifying calculation significantly.
Calculating GST is now simpler. For intrastate transactions (within same state), GST is split equally as CGST (Central) and SGST (State). For interstate transactions, IGST applies at the full rate. Use our free GST calculator for instant calculation.
Example: Product MRP ₹10,000 at 18% GST = ₹11,800 total. CGST = ₹900, SGST = ₹900 for intrastate sale.
GST 2.0 reduces compliance burden significantly. With fewer slabs, businesses need to classify products in just three buckets instead of five. ITC (Input Tax Credit) calculations become simpler. GST returns filing — monthly GSTR-1 and GSTR-3B — remains the same process but classification disputes should reduce substantially.