Revised GST Slab Rates in India F.Y. 2025-26 by Council

Mar 31, 2025

GST is the most important tax-related reformation in the country. It began with unity in the taxation structure and reduced the various types of taxes that were applicable in the previous regime. The GST Council meeting is conducted regularly to improve the overall GST rates for multiple goods.

Various states and industries support a decrease in the GST tax rate for different items, which are taken into discussion in the council meetings. The finance minister, Nirmala Sitharaman, and her panel of ministers are likely to discuss the complete redesigning of the four slab tax GST rates under the regime, as per the sources.

The lower rates could be hiked to 6% and 13% from the current 5% and 12%, and it was also made to the sources that the GST rates would be finally merged into a lesser slab. The details on the GST rate hike will be clear in the near future.

Δ

The government recently wanted to change the GST rates and wanted to keep them as per the original rates but the changes in customer preference and other factors led to different decisions.

Therefore, after the final revaluation of the commodities of the basic consumers, it was found that most of the products must be in the necessities category instead of the luxury category.

Before GST, there was a Service Tax, which was levied on the allotment of loans. The rate of Service Tax was 15%, which has now increased to 18% for GST. According to the opinion of many people, the effective loan amount will increase due to higher GST rates by 3% over the Service Tax rates.

While others say that increased GST rates will increase EMIs. However, all the doubts of people will also be cleared that GST is not collected on repayment of the loan or payment of interest on the loan.

GST is levied on the processing charges and any other charges, rather than the principal repayment and interest payment amount. Among others, the included charges are Loan Processing, Loan Prepayment Charges, etc, if any.

Since a major part of the loan repayment consists of principal repayment and interest payment, the GST effect on loans would tend to be negligible. To have a better understanding of the GST impact, have a look at the mentioned GST impacts on loans.

The important loans and their respective GST rates are listed below.

Since the implementation of GST on cars, the GST rates on all personal use vehicles have been fixed at 28% no matter whether the vehicle is petrol-powered or diesel-powered. Other than this, a composition cess is also levied on cars over the announced GST rates. This, in turn, estimated the applicable tax rates on vehicles under GST between 29% to 50%.

However, vehicles using cleaner technologies such as fuel cells (e.g. hydrogen fuel cells) and electric vehicles attract subsidized lower rates of taxation. Know more about GST on cars.

Since gold-made items (jewellery) are brought into the GST system, the rates applicable are 3%. However, a 5% GST is also levied as jewellery-making charges if the manufacturing task is being outsourced to a job worker. The Jeweler is liable to claim these making charges as an input tax credit (ITC), which in turn calculates the final bill to be paid by the purchaser only at a chargeable 3% GST charge. Know more about GST on Gold and its impact on the gold industry.

In the real estate sector, the GST is levied only on the purchase of an under-development property. After the inclusion of real estate under the GST regime, the applicable tax rates on commercial and residential transactions were 12%, valid till 31st March 2019. But, from the very next day, 1st April, the GST rates on residential real estate have been altered to 5% for non-affordable housing properties, while for affordable housing properties, the levied tax rate is 1%.

On the other hand, the ready-to-move-in property is not liable to attract any GST. In addition to this, various building materials used for the construction of houses/flats that fall under GST are taxable from 5% (sand, marble rubble, etc.) to 28% (cement, etc.). Know more about GST’s impact on real estate in India.

The Government is considering some new tactics so that a few new products could also be brought into the GST system. The Finance Minister hinted the same that the government could include other products under GST with tax rate reduction on some products. The highly anticipated products to introduce under the GST rates slab include:

The introduction of GST has turned the Indian economy upside-down, and it became only possible by bringing in the net appropriate price for the goods and services under a single taxation system. A few of the important GST rate impacts on the Indian economy are listed below:

The GST implementation in the country has brought down the prices of goods and services, and consequently, the final consumer is experiencing less tax burden on the goods and services. It has been seen that the GST system has extended the scope of increased production, which increases competition.

The introduction of the single taxation system, GST has simplified the calculation of tax to a greater extent. In addition to this, the existing multiple taxations have been superseded which results in saving of time and money.

Earlier, the applicable multiple taxes at almost every stage of supply made the taxpayers confused. But with the GST, a uniform tax system has been established in the country for an easy collection of tax.

Since the day GST got imposed in the Indian economy, the cost of production has been seen falling. Consequently, the competition towards international markets has increased which directly impacted the exports positively.

The implementation of GST brought various traders, cloth merchants, and private security agencies to protest against the GST rates. Cloth merchants were in protest against the 5 % sales tax on textiles under this new tax regime, while the iron, wire dying, and steel traders were opposing high GST rates. The steel traders were pushing their forces to prove the GST high rates and elaborate paperwork responsible for a 40% collapse in trade

Also, the owners and employees of private security agencies silently held a protest against the levied GST rates of 18% on security services because with the higher GST rates a major part of their wages and benefits were taken away from them.

The government imposed GST on services, which follows a similar 4-tier tax structure to that on goods. The GST rates of 5%, 12%, 18% and 28% on goods were affecting consumers with several pros and cons on services. However, services such as healthcare and educational services were excluded from GST. The passed GST rates slabs from the GST council consist of NIL, 5%, 12%, 18%, and 28% rates on different services. Some of them are mentioned below under different categories.

Nil GST

Chargeable services are offered on Basic Savings Bank Deposit (BSBD) accounts opened under the PMJDY (Pradhan Mantri Jan Dhan Yojana)

5% Tax Slab

12% Tax Slab

18% Tax Slab

28% Tax Slab

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."