GST Rates 2026: The 5–18–40 Structure
GST now has three rates: 5% (merit), 18% (standard) and 40% (demerit). The structure took effect on 22 September 2025, replacing the four-slab 5/12/18/28 system: essentials at 5%, most goods and services at 18%, luxury and sin goods at 40%.
What the 5–18–40 slabs replaced
The September 2025 rate rationalisation, effective 22 September 2025 · CBIC notifications † pending CA verification
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Do you need to register?
Registration is about turnover, not profit. Cross the threshold for your kind of supply and GST registration becomes mandatory.
| Supply type | Annual turnover threshold | Notes |
|---|---|---|
| Goods † | ₹40,00,000 | Standard threshold; lower in special-category states. |
| Services † | ₹20,00,000 | Standard threshold; lower in special-category states. |
† Standard thresholds, pending CA verification against CBIC notifications. Inter-state suppliers and most e-commerce sellers must register regardless of turnover.
Questions people actually ask
What are the GST rates in India in 2026?
Three: a 5% merit rate for essentials and mass-consumption goods, an 18% standard rate covering most goods and services, and a 40% demerit rate for luxury and sin goods. The structure has been in force since 22 September 2025.
What happened to the 12% and 28% GST slabs?
They were folded into the new structure in the September 2025 rationalisation: most items in the 12% slab moved to 5% or 18%, and most 28% items moved to 18%, with luxury and sin goods going to the new 40% rate that replaced the old 28%-plus-cess treatment.
What turnover requires GST registration?
₹40 lakh a year for suppliers of goods and ₹20 lakh for services under the standard thresholds. Special-category states have lower limits, and some businesses (inter-state suppliers and most e-commerce sellers) must register regardless of turnover.