GST rate structure after the September 2025 rationalisation

The 56th GST Council moved most goods and services to a two-rate structure (5% and 18%) with a 40% de-merit rate, effective 22 September 2025, with tobacco-related exceptions.

On the recommendations of the 56th GST Council (September 2025), the earlier four-slab structure was consolidated into:

• 18%: standard rate
• 5%: merit rate
• 40%: special de-merit rate for a select few goods and services

Nil/exempt entries and special rates (e.g., on precious metals) continue as notified.

Effective dates

• Services and most goods: 22 September 2025.
• Pan masala, gutkha, cigarettes, chewing tobacco (e.g. zarda), unmanufactured tobacco and bidi continue at the earlier GST + compensation cess rates until the compensation-cess loan obligations are discharged. The transition date is to be notified.

Book-keeping checklist after any rate change

• Update HSN/SAC-wise rates in item and ledger masters, with an applicable-from date so earlier invoices keep the old rate.
• The time of supply rules (Section 14 of the CGST Act) decide which rate applies when invoice, payment and supply straddle the change date.
• Petrol, diesel, ATF, natural gas and crude remain outside GST (see the petrol-bunk articles).

Always confirm the rate for a specific HSN in the rate notifications. This page does not list item-wise rates.