GST 2.0 slab rates explained: 0%, 5%, 18% and 40%
From 22 September 2025 India's GST has four slabs: 0%, 5%, 18% and 40%. The 12% and 28% slabs were abolished. Most goods moved to 5% or 18%; the new 40% rate covers luxury and sin goods such as tobacco, pan masala and aerated sugary drinks.
What actually changed
The GST Council announced the rationalisation on 3 September 2025 and the new structure became operational on 22 September 2025. Two slabs were removed and one was added, so the count stayed at four but the mapping underneath moved for a large share of goods.
- 0% - essentials including dairy, life-saving medicines and educational material
- 5% - daily essentials, packaged foods, FMCG and toiletries
- 18% - most goods and services, including electronics, appliances, cement and vehicles
- 40% - luxury and sin goods, including tobacco, pan masala and aerated sugary drinks
- 12% and 28% - abolished
Why this breaks old billing setups
Any system holding a rate against a product rather than looking it up still carries 12% and 28% against real SKUs. Those invoices are wrong from 22 September 2025 onward, and the error compounds quietly because the invoice still prints and the customer still pays.
Check the products that moved, not the ones that did not
The risk is concentrated in items that sat at 12% or 28%. Anything already at 5% or 18% probably stayed. Filter your catalogue by GST rate and look at the two abolished slabs first.
HSN codes did not change
The slab structure changed; HSN classification did not. If your HSN codes are right, remapping is a rate change per item, not a re-classification exercise.
What to do in your own catalogue
This is a half-hour job for a normal catalogue and it is worth doing before your next return rather than after a notice.
- Export your product list with HSN code and current GST rate
- Filter for anything still at 12% or 28%
- Confirm the new rate for each HSN against the current notification
- Re-import the corrected rates and raise one test invoice per rate
- Check that CGST and SGST split correctly in-state and IGST applies inter-state
How filarity handles it
GST rate is a per-product field in filarity, set on CSV import or edited in the product record. Invoices split into CGST and SGST for sales inside your state and use IGST for other states, with the HSN code carried per line. If your business is not GST registered, invoices render with no tax columns at all and you can switch GST on later from Settings.
Sources
Rates, thresholds and fee structures change. This article states the date each figure applies from - check the primary source before acting on it.