A Comprehensive Guide to GST Rates in India, 2025

The Goods and Services Tax (GST) has been one of India's most transformative tax reforms since its introduction on July 1, 2017. In 2025, the structure has evolved significantly to include updates, revisions, and simplifications based on economic demands and GST Council decisions. This blog delves into the updated GST rates in India for 2025, their structure, recent changes, and category-wise rate application.

GST Rates in India: A Quick Refresher

GST is a comprehensive, destination-based indirect tax levied on the supply of goods and services. It subsumes several central and state taxes including VAT, service tax, excise duty, etc. The objective of GST is to unify the tax structure, enhance compliance, and eliminate the cascading effect of taxes.

There are 5 primary GST slabs for goods and services:

1. Nil/Exempt-0%
2. Lower Rate-5%
3. Standard Rates-12%
4. Medium Range Rates-18%
5. Higher/Luxury Rate-28%

GST Rate in India: Structure in 2025

As per the 51st GST Council Meeting (March 2025), the rate structure remains largely intact with minor tweaks in categories. Here's the current breakup:

1. GST Exempted (0%)

This slab includes essential items and services aimed at benefiting the general population and weaker economic sections. In 2025, over 90 goods and services remain exempt.

Key Examples:

• Unbranded fresh fruits and vegetables
• Milk, curd, and buttermilk
• Public transportation (non-AC)
• Educational services
• Healthcare services
• Sanitary napkins, etc.

2025 Update: Renewable energy devices and bio-fertilizers continue to be exempt under sustainability initiatives.

2. 5% GST Rate

The 5% GST rate is generally applicable to essential goods and services to keep them affordable for the masses. This rate balances revenue needs with social welfare considerations.

2025 Update: Drones used for agricultural purposes added to 5% slab with conditions. Compressed Bio-Gas (CBG) used in transport/fertilizer production added to encourage clean energy adoption.

3. 12% GST Rate

The 12% GST slab applies to intermediate or semi-essential goods and services—those that are not absolute necessities but still widely used by households, businesses, and institutions. Here is the list:

2025 Addition with GST Rates in India: AI-based educational tools and e-learning platforms now included under 12% slab for encouraging digital literacy.

4. 18% GST Rate

This is the most common GST rate, covering a majority of goods and services. The list of goods or services go under it are:

Recent Adjustment (2025):

Cloud kitchens and online food delivery platforms remain taxed at 18%. Streaming services like Netflix, Hotstar moved to full 18% compliance with monthly GST reconciliation.

5. 28% GST Rate

Reserved for luxury goods, sin products, and environmental hazards included in GST Rates in India:

2025 Shift: GST Council maintained 28% + sin cess on tobacco, and special cess on online gaming, pegged at 28% flat for Real Money Gaming (RMG) platforms.

Latest GST Council Announcements (2025)

In 2025, the GST Council proposed merging the 12% and 18% slabs into a single 15% rate, but yet not implemented. Key updates include 28% GST on online gaming, relief for MSMEs on late fees, clarified EV and solar input credits, and streamlined compliance norms via automation and e-invoicing enhancements.

Sector-Wise Impact of GST Rate Updates in 2025

The 51st and 52nd GST Council meetings introduced some critical changes:

Key Changes Introduced

Sector-Wise Impact of GST Rate Updates in 2025

1. Education

Online courses taxed at 12% if non-recognized by UGC/AICTE. Traditional education services remain exempt.

2. Retail & E-commerce

Uniform taxation on returns and refunds streamlined. Marketplaces must now issue GST-compliant invoices even on dropshipped items.

3. Healthcare

Medical devices remain at 12% but proposal to reduce rate for prosthetics and implants under review.

4. Online Gaming

All forms of online RMG taxed at 28%, including platforms offering poker, fantasy, and betting. GST to be applied on the full contest amount, not net commission.

Input Tax Credit (ITC) Adjustments – 2025

As part of the simplification agenda, real-time ITC reconciliation via GSTR-2B is enforced strictly. No ITC on CSR expenditure which is reaffirmed by SC ruling in 2024. Besides, blocked credits list updated that provides employee benefits, gifts, club memberships remain ineligible.

GST Collection Trends – 2025 (YTD)

India’s GST collections showed steady growth in early 2025, beginning with ?1,67,540 crore in January and rising to ?1,72,111 crore in February. March saw a further increase to ?1,82,793 crore. The momentum peaked in April 2025 with a record-breaking ?1,87,000 crore, the highest monthly collection since GST’s rollout in 2017. This surge reflects year-end business filings, improved compliance, and stronger domestic demand, highlighting economic recovery and effective tax administration.

GST revenues have grown by 11.5% YoY, aided by improved compliance and expansion of digital services.

Challenges Still Ahead

Despite rationalization and tech upgrades, certain challenges persist:

1. Rate Complexity: 5 slabs still lead to classification disputes.
2. Litigation: Online gaming and cryptocurrency GST cases pending in High Courts.
3. Evasion: Fake invoicing and GST refund scams continue in certain sectors.
4. SME Burden: High compliance cost for small businesses with limited tech literacy.

Future of GST in India

Over the next 12–18 months, the GST Council is poised to introduce transformative reforms, including the implementation of a unified mid-rate around 15% to simplify the tax structure. Key proposals include bringing petroleum products under GST, expanding the tax net to cover digital assets and social media influencers, and adopting AI-powered e-invoicing systems. These measures aim to boost compliance, increase transparency, and modernize India’s indirect tax framework for a digital economy.

Conclusion

The GST structure in 2025 shows clear signs of maturity, rationalization, and digital enforcement. While some rate disparities remain, the system is better aligned with economic realities and evolving market dynamics. The GST Council’s push toward simplification and digitization is expected to ease compliance and expand the tax base further.

Stay updated with every GST Council meeting, as even small changes can significantly impact businesses and consumers alike.

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FAQs on GST Rates in India – 2025

1. What are the current GST rate slabs in India as of 2025?
The GST slabs in 2025 remain at 0%, 5%, 12%, 18%, and 28%. Essential goods are exempt or taxed at 5%, while luxury goods and sin products are taxed at 28% (often with cess).

2. Has the GST Council proposed any changes in the rate structure for 2025?
Yes. The GST Council is discussing a merger of the 12% and 18% slabs into a proposed 15% mid-rate, likely to be implemented in 2026.

3. What is the GST on food delivery in 2025?
Online food delivery platforms and cloud kitchens continue to attract 18% GST, applicable on the total invoice amount.

4. Is GST applicable on educational services in 2025?
Yes and no. Core educational services by recognized institutions remain exempt, but private coaching and e-learning platforms are taxed at 12% or 18%, depending on recognition status.

5. What is the GST on online gaming in 2025?
Online Real Money Gaming (RMG) is taxed at a flat 28%, applicable on the full contest or entry amount, not just the platform fee.

6. Has there been any change in GST on electric vehicles (EVs) in 2025?
No change. Electric vehicles continue to be taxed at 5% GST, promoting clean energy adoption.

7. What is the GST on mobile phones and electronics in 2025?
Smartphones are taxed at 18%, while accessories and some consumer electronics (like air conditioners and refrigerators) fall under the 28% slab.

8. Are healthcare services exempt from GST in 2025?
Yes. Most essential healthcare services remain exempt. However, medical devices and diagnostic kits are generally taxed at 12%.

9. What is the GST rate for real estate in 2025?

• Affordable housing: 1% GST (without ITC)
• Other under-construction property: 5% GST (without ITC)
• Ready-to-move homes with completion certificates are exempt from GST.

10. Where can I check updated GST rates for specific goods or services?
You can refer to the official GST portal or the latest notifications from the Central Board of Indirect Taxes and Customs (CBIC).