India GST Slabs 2026: Every Category + Calculation Examples

India's GST has five slabs: 0%, 5%, 12%, 18%, and 28%. This guide covers every major category, HSN codes, and worked calculation examples so you never under-bill or overpay.

1.The five GST slabs and the philosophy behind them

India's GST Council placed goods and services into five slabs: 0% (essential items — fresh food, healthcare, education), 5% (staple goods — packaged food, domestic LPG, transport), 12% (processed food, most medicines, mobile phones), 18% (the "standard" rate — most services, electronics, household goods), 28% (luxury and sin goods — large cars, tobacco, cement, aerated drinks). The 28% slab often has an additional GST Compensation Cess on top — 1% to 22% depending on the item. Getting the slab wrong can mean under-collected GST (an audit liability) or overpaid GST (a cash flow drain).

2.Key 0% and 5% items that businesses commonly misclassify

0% GST: fresh fruits and vegetables, eggs, milk, curd, natural honey, unprocessed flour, rice, wheat. Unbranded items are often exempt while branded versions attract 5-12%. 5% GST: packaged and branded food items, frozen vegetables, coffee and tea (not served in restaurants), domestic LPG, fertilizers, insulin, lifesaving drugs. Common misclassification: branded flour attracts 5% but unbranded doesn't. A restaurant that sells packaged food items (not served) must charge GST; dine-in restaurant service is a separate 5% category. Know whether your product is "branded" per GST definition — it turns on trademark registration.

3.The 18% slab: where most services and B2B transactions live

18% is the default rate for most services in India: software services (IT/ITES), consulting, legal, accounting, marketing, advertising, e-commerce aggregator services, hotel rooms above ₹7,500/night, telecom, banking fees, insurance premium (life insurance input portion). Most B2B service providers issue 18% GST invoices. Manufacturing of most household goods (soaps, toothpaste, paints, electrical goods, white goods) is also 18%. If you're unsure about a product or service category, 18% is often the default before you verify the exact HSN/SAC code.

4.Calculating GST: forward and reverse examples

Forward GST (adding GST to a base price): Base price ₹10,000, GST rate 18%. GST amount = ₹10,000 × 18% = ₹1,800. Invoice value = ₹11,800. If interstate (IGST): single 18% line. If intrastate (CGST+SGST): ₹900 CGST + ₹900 SGST. Reverse GST (extracting GST from an MRP): MRP ₹11,800 including 18% GST. Base price = ₹11,800 / 1.18 = ₹10,000. GST component = ₹1,800. Formula: GST amount = Total price × GST rate / (100 + GST rate). This reverse calculation matters for consumers checking bills and retailers pricing accurately to an MRP.

5.Input Tax Credit: the GST benefit most small businesses miss

GST-registered businesses can claim Input Tax Credit (ITC) — the GST paid on purchases offsets GST collected on sales. Example: you're a marketing consultant, collect 18% GST on ₹5L revenue = ₹90,000 output GST. You bought a laptop for ₹1.5L + 18% GST (₹27,000) and phone for ₹50,000 + 18% GST (₹9,000). Input credits = ₹36,000. Net GST payable = ₹90,000 - ₹36,000 = ₹54,000. You save ₹36,000 in tax you would have otherwise paid. ITC is available only if you're GST-registered, have valid tax invoices, and the purchase is for business use.