Question
New GST rates 2025: what changed under GST 2.0 (0%, 5%, 18% and 40%)?
Answer
Bottom line: From 22 September 2025 the GST Council rationalised the slabs to mainly 5% and 18%, with a 40% rate on sin and luxury goods, and largely removed the 12% and 28% slabs.
1. The new structure
Most 12% items moved to 5% and most 28% items to 18%. A special 40% rate applies to demerit goods such as pan masala, aerated drinks, tobacco and high-end cars.
2. Tobacco timing
Cigarettes and other tobacco stayed on the old rate plus compensation cess until 1 February 2026, when the cess ended and they moved to 40%.
3. Special rates
Gold and rough diamonds keep their separate 3% and 0.25% rates.
Work out any rate with our GST Calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.