By Poornima Tax Solution ·
The short answer
Earlier, GST rates were spread across six slabs — 0%, 5%, 12%, 18%, 28% and special rates for certain goods. The structure has now been simplified to four: nil (exempt), 5%, 18% and a 40% rate for a small list of demerit goods. Most items from the 12% slab have moved into 5% or 18%, and most 28% items have moved to 18%.
What changed in practice
The 12% slab has largely been merged into the 5% and 18% slabs, and the 28% slab has been mostly folded into 18%, with a short list of demerit goods — such as pan masala, aerated sugary drinks and luxury vehicles — attracting the 40% rate. Everyday items such as many food staples, medicines and essentials have seen reductions to 5% or nil.
What businesses should update
Price lists, item-wise GST rates in accounting software, e-invoice and e-way bill masters, and HSN-wise rate mapping all need to reflect the new slabs from the effective date. Invoices raised on or after the change must apply the new rate, and credit notes or revised invoices may be needed for supplies straddling the changeover.
Impact on input credit and filings
Input tax credit continues to follow the rate actually charged by your supplier, so reconcile GSTR-2B against the new rates during the transition period. GSTR-1 and GSTR-3B filings continue as before; the change is in the rate applied per item, not in the return process itself.
How we help
We update client rate masters, review HSN-wise mapping, and check that invoices and returns apply the correct slab from the effective date. Share your item list and we will confirm the new rate for each one.
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Contact Poornima Tax SolutionThis article is general information, not advice for your specific case. Rules and thresholds change; contact us to confirm what applies to you.