{"id":2352,"date":"2026-10-13T21:11:19","date_gmt":"2026-10-13T15:41:19","guid":{"rendered":"https:\/\/www.tiwaripedia.com\/index.php\/2026\/10\/13\/gst-2-0-explained\/"},"modified":"2026-10-13T21:18:18","modified_gmt":"2026-10-13T15:48:18","slug":"gst-2-0-explained","status":"publish","type":"post","link":"https:\/\/www.tiwaripedia.com\/index.php\/2026\/10\/13\/gst-2-0-explained\/","title":{"rendered":"GST 2.0 Explained: New 5% and 18% Slabs, 40% Rate and What Became Cheaper"},"content":{"rendered":"<p><em>Last updated: October 2026 \u00b7 3 min read<\/em><\/p>\n<p>From <b>22 September 2025<\/b>, India moved to <b>GST 2.0<\/b>: most goods and services now fall into two main slabs, <b>5%<\/b> and <b>18%<\/b>, replacing the earlier four-slab system of 5%, 12%, 18% and 28%. A special <b>40%<\/b> rate applies to luxury and sin goods.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" loading=\"lazy\" width=\"1200\" height=\"675\" src=\"https:\/\/www.tiwaripedia.com\/wp-content\/uploads\/2026\/10\/gst-2-0-explained.png\" alt=\"Infographic: GST 2.0 Explained: New 5% and 18% Slabs, 40% Rate and What Became Cheaper\" class=\"wp-image-2351\" srcset=\"https:\/\/www.tiwaripedia.com\/wp-content\/uploads\/2026\/10\/gst-2-0-explained.png 1200w, https:\/\/www.tiwaripedia.com\/wp-content\/uploads\/2026\/10\/gst-2-0-explained-300x169.png 300w, https:\/\/www.tiwaripedia.com\/wp-content\/uploads\/2026\/10\/gst-2-0-explained-1024x576.png 1024w, https:\/\/www.tiwaripedia.com\/wp-content\/uploads\/2026\/10\/gst-2-0-explained-768x432.png 768w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><figcaption>GST 2.0 Explained: New 5% and 18% Slabs, 40% Rate and What Became Cheaper \u2013 infographic by Tiwaripedia<\/figcaption><\/figure>\n<h2>Old vs new structure<\/h2>\n<figure class=\"wp-block-table\"><table><thead><tr><th><\/th><th>Before 22 Sept 2025<\/th><th>GST 2.0<\/th><\/tr><\/thead><tbody><tr><td>Main slabs<\/td><td>5%, 12%, 18%, 28%<\/td><td>5% and 18%<\/td><\/tr><tr><td>Special rate<\/td><td>28% + compensation cess<\/td><td>40% for luxury and sin goods<\/td><\/tr><tr><td>Essentials<\/td><td>0% or 5%<\/td><td>0% or 5%<\/td><\/tr><tr><td>Individual life and health insurance<\/td><td>18%<\/td><td>Exempt (0%)<\/td><\/tr><\/tbody><\/table><\/figure>\n<h2>What became cheaper (examples)<\/h2>\n<ul><li>Many daily-use items such as soaps, shampoos, toothpaste and packaged foods moved to 5%.<\/li><li>Items like ACs, TVs above 32 inches, dishwashers and small cars moved from 28% to 18%.<\/li><li>Many medicines and medical devices moved to 5% or nil.<\/li><li>Individual life and health insurance premiums became GST-free.<\/li><li>Cinema tickets up to \u20b9100 moved to 5%.<\/li><\/ul>\n<h2>What attracts 40%<\/h2>\n<p>Luxury and &#8220;sin&#8221; goods, such as pan masala, aerated and sugary drinks, large luxury cars and motorcycles above 350 cc, attract 40%. Tobacco products continued under their earlier rate plus cess for a transition period linked to repaying compensation cess loans.<\/p>\n<h2>How GST works (quick recap)<\/h2>\n<p>GST is a destination-based tax on supply of goods and services. Within a state, it is split into <b>CGST<\/b> and <b>SGST<\/b>; between states it is <b>IGST<\/b>. Businesses claim <b>input tax credit<\/b> for GST paid on purchases, so tax is paid only on value added. Registration is generally required above \u20b940 lakh turnover for goods (\u20b920 lakh for services; lower in special category states).<\/p>\n<h2>What it means for you<\/h2>\n<p>Lower rates on many household items and insurance reduce monthly costs, provided businesses pass on the cut. If you run a business, update billing software, product tax codes (HSN) and price lists, and watch for further GST Council notifications.<\/p>\n<h2>Frequently asked questions<\/h2>\n<h3>When did GST 2.0 start?<\/h3>\n<p>On 22 September 2025, after the 56th GST Council meeting approved the changes.<\/p>\n<h3>Is health insurance GST-free now?<\/h3>\n<p>Yes. Premiums on individual health and life insurance policies are exempt from GST under GST 2.0.<\/p>\n<h3>Are 12% and 28% slabs abolished?<\/h3>\n<p>For most goods, yes; items were moved to 5% or 18%, with a special 40% rate for select luxury and sin goods.<\/p>\n<h2>Keep exploring<\/h2>\n<ul><li><a href=\"\/index.php\/2026\/10\/13\/income-tax-act-2025-explained\/\">Income Tax Act 2025 explained<\/a><\/li><li><a href=\"\/index.php\/2026\/10\/13\/health-insurance-basics-india\/\">Health insurance basics<\/a><\/li><li><a href=\"\/index.php\/2026\/10\/13\/how-box-office-collection-works\/\">How box office collection works<\/a><\/li><li><a href=\"\/index.php\/category\/tax-itr\/\">More Tax &#038; ITR articles on Tiwaripedia<\/a><\/li><\/ul>\n<p><em>This article is for general information, not financial, tax or legal advice. Rates, limits and rules change; always confirm on the official website or with a qualified advisor before you act. Spotted something that needs updating? <a href=\"\/index.php\/contact-us\/\">Let us know<\/a>.<\/em><\/p>","protected":false},"excerpt":{"rendered":"<p>GST 2.0 explained: the two-slab structure of 5% and 18% from 22 September 2025, the 40% rate for luxury and sin goods, GST-free health and life insurance, and examples.<\/p>\n","protected":false},"author":1,"featured_media":2351,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"googlesitekit_rrm_CAow_YXIDA:productID":""},"categories":[4,330],"tags":[],"_links":{"self":[{"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/posts\/2352"}],"collection":[{"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/comments?post=2352"}],"version-history":[{"count":1,"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/posts\/2352\/revisions"}],"predecessor-version":[{"id":2448,"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/posts\/2352\/revisions\/2448"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/media\/2351"}],"wp:attachment":[{"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/media?parent=2352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/categories?post=2352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tiwaripedia.com\/index.php\/wp-json\/wp\/v2\/tags?post=2352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}