GST (Goods and Services Tax) was introduced in India on 1 July 2017, replacing a complex web of indirect taxes. It is levied on the supply of goods and services across India. Understanding GST slabs helps you calculate costs accurately — whether you're a business owner, freelancer, or consumer.
GST Structure in India
GST in India has a dual structure:
- CGST (Central GST) — collected by the Central Government
- SGST (State GST) — collected by the State Government
- IGST (Integrated GST) — for inter-state transactions (= CGST + SGST)
CGST + SGST = IGST. For example, 18% GST means 9% CGST + 9% SGST for intra-state, or 18% IGST for inter-state.
GST Rate Slabs 2025
0% GST (Nil Rated)
- Fresh vegetables, fruits, milk, eggs
- Un-branded food grains, flour, salt
- Healthcare services, educational services
- Books, newspapers
5% GST
- Packaged food items, edible oils, sugar, tea, coffee
- Domestic LPG, kerosene
- Economy class air travel, transport services
- Apparel below ₹1,000, footwear below ₹1,000
12% GST
- Processed food, butter, ghee, cheese
- Business class air travel
- Mobile phones (handsets)
- Non-AC hotel rooms (₹1,000–₹7,500/night)
18% GST (Most Common)
- Restaurants (AC), most services
- IT services, professional services, consulting
- Capital goods, industrial equipment
- Hotel rooms (above ₹7,500/night)
- Insurance premiums
28% GST (Luxury/Sin Tax)
- Passenger cars, motorcycles above 350cc
- Cement, paints, perfumes
- Tobacco, pan masala, cigarettes
- Amusement parks, casinos, betting
- 5-star hotels and luxury resorts
GST for Freelancers & Small Businesses
If your annual turnover exceeds ₹20 lakh (₹10 lakh for some states), GST registration is mandatory. Most professional services (IT, consulting, design) attract 18% GST. You must:
- Register for GST on the GST portal
- Charge GST on your invoices
- File monthly/quarterly returns
- Claim input tax credit (ITC) on purchases