GST Rate Slabs Explained: Finding the Right Rate for Your Work
India's GST system uses a tiered rate structure rather than a single flat rate. The rate that applies to your product or service is fixed by the government and doesn't change based on who you are or how much you earn — but it does require you to identify the right category for what you supply.
The five main slabs
GST operates across five primary rate slabs, each targeting a different category of goods and services:
| Rate | What typically falls here |
|---|---|
| 0% | Essential goods and services: unbranded food grains, fresh vegetables, milk, eggs, educational services, healthcare, and certain social-sector services. |
| 5% | Basic necessities above the exemption threshold: packaged food items, household goods like sugar and edible oils, economy-class travel, small restaurants. |
| 12% | Mid-tier goods and services: processed foods, business-class air travel, certain construction services, most printed books (non-exempt categories). |
| 18% | The broadest and most common slab: most professional and IT services, telecom, financial services, software, most manufactured goods. |
| 28% | Premium and sin-goods: luxury cars, tobacco products, aerated drinks, high-end consumer electronics, pan masala. An additional cess often applies on top. |
There is also a small set of goods and services that fall completely outside GST — alcohol for human consumption, petroleum products, and electricity are governed by state-level taxes rather than GST.
Goods vs services: the same slabs, different codes
The same five slabs apply to both goods and services, but they're identified differently:
- Goods are classified by HSN codes (Harmonised System of Nomenclature), an internationally standardised system.
- Services are classified by SAC codes (Services Accounting Code), a system specific to India's GST regime.
This distinction matters for your invoices — you must report the correct code type, not just the rate. A software development service uses a SAC code; a physical product uses an HSN code. For details on finding and using these codes, see HSN & SAC Codes Explained.
Why 18% is the most common services rate
For most freelancers and small service businesses — designers, developers, consultants, copywriters, marketing agencies, IT firms — the rate is 18%. This is because the GST schedule places the bulk of "professional, technical, and business services" in the 18% slab.
A few notable exceptions within services:
- Healthcare and educational services: generally exempt (0%)
- Goods transport agencies, certain logistics services: 5% or 12%
- Works contract services (construction): 12% or 18% depending on the nature of the contract
- Restaurant services (non-AC, non-liquor-serving): 5%
If you provide a single type of service consistently, you'll quickly learn your rate. If your work spans categories, verify each line item's code and rate.
How to find your rate
When unsure, look up your HSN or SAC code
Don't guess at the rate — use the GST Rate Finder on the GST portal (gst.gov.in → Services → User Services → Search HSN/SAC) to search by keyword, HSN code, or SAC code. Enter a description of your service or product and verify the rate it returns. Cross-reference with a CA if you supply anything in an ambiguous category.
Identify whether you supply goods or services
Physical products use HSN codes; services use SAC codes. Mixed supplies (a product bundled with installation, for example) have their own rules.Find your HSN or SAC code
Use the GST portal's search tool, or refer to the HSN/SAC schedule published by CBIC. The HSN & SAC Codes Explained article covers this in detail.Look up the applicable rate
Cross-reference the code with the GST rate schedule (Schedule I to V of CGST Notification 1/2017 for goods; Notification 11/2017 for services). The portal's rate finder does this automatically.Apply consistently
Once confirmed, apply that rate to every invoice for that item or service. Inconsistency between invoices and returns is a common trigger for GST notices.
When rates change
GST rates are not permanent. The GST Council — which meets periodically and includes representatives from the central and all state governments — can revise rates up or down for any category. Rate changes typically take effect from a notified date and are announced via GST Council press releases before being formalised as notifications in the official gazette.
Always verify current rates
The rates in this article reflect the GST schedule as broadly understood in mid-2026, but council meetings can introduce changes. Before issuing invoices in a new financial year — or after any GST Council meeting — verify that your product or service rate hasn't been revised. The official CBIC website (cbic.gov.in) publishes all current notifications.
Changes in rate can also affect reverse charge applicability and the composition scheme eligibility threshold. If a significant rate revision is announced in your sector, review your invoice template and inform your clients.
Applying rates in your invoicing workflow
Once you've confirmed the right rate for each service or product you sell, the practical step is to configure it in your invoicing tool so it's applied consistently without manual recalculation.
In E-BillR's catalog, you can set a default GST rate per item — that rate is then pre-filled on every invoice where you use that item. See the items guide for how to add and configure catalog items.
For a full picture of what goes on a compliant invoice — beyond just the rate — see GST Invoice Format: What a Compliant Invoice Must Include. And for the foundation of how GST works as a system, What Is GST? is a good starting point.
General information only
This is general information, not professional tax advice — check with a qualified CA or tax professional for guidance on the correct rate for your specific goods or services.
Keep reading
What Is GST? A Plain-English Guide for Indian Small Businesses
GST explained without the jargon — what it is, who needs to pay it, and what it means for your invoices.
GST Invoice Format: What a Compliant Invoice Must Include (2026)
Every field a tax invoice legally needs in 2026 — with a field-by-field checklist you can copy.
CGST, SGST & IGST Explained: Which Goes on Your Invoice?
The difference between CGST, SGST, and IGST — and a simple rule for knowing which to charge on every invoice.