Under GST 2.0, goods and services are classified into four tax levels or slabs. These tax levels are based on the nature and category of items. Essential and daily-use items are generally placed under lower tax slabs, while luxury and leisure items are placed under the highest tax slab.
The four GST 2.0 tax levels are 0%, 5%, 18%, and 40%.
Level 1: Items with 0% GST
The 0% GST slab covers essential and basic-use items. Under GST 2.0, certain daily food products, individual items, life insurance, and stationery items have been brought under the Nil GST rate.
| Item/Category | Items | Previous GST Rate | New GST Rate |
|---|---|---|---|
| Foods (Daily) | Milk, bread, fruits and vegetables | 5% | 0% |
| Individual Items & Life Insurance | N/A | 18% | 0% |
| Stationery | Books, pens, pencils and erasers | 12% | 0% |
Exam Point: Items under this level attract 0% GST. The tax rate on the listed daily food items has been reduced from 5% to 0%, while the listed stationery items have moved from 12% to 0%.
Level 2: Items with 5% GST
The 5% GST slab mainly covers medical products, agricultural equipment, personal care products, household items, and certain dairy and baby-care products.
| Item/Category | Items | Previous GST Rate | New GST Rate |
|---|---|---|---|
| Medical & Diagnostic | Thermometer, medical-grade oxygen, diagnostic kits and reagents, glucometer and test strips | 12% | 5% |
| Eye Care | Corrective spectacles | 5% | 5% |
| Agriculture Equipment | Tractor types and parts, tractors, specified bio-pesticides, micronutrients, drip irrigation systems, sprinklers and agricultural, horticultural and forestry machines used for soil preparation, cultivation, harvesting and threshing | 12%–18% | 5% |
| Personal Care & Hygiene | Hair oil, shampoo, toothpaste, toilet soap bars, toothbrushes and shaving cream | 18% | 5% |
| Dairy & Snacks | Butter, ghee, cheese, dairy spreads, pre-packaged namkeens, bhujia and mixtures | 5% | 5% |
| Household Items | Utensils, sewing machines and parts | 12% | 5% |
| Baby & Clinical Items | Feeding bottles, napkins for babies and clinical doctors | 5% | 5% |
The reduction in GST rates on medical and diagnostic products, agricultural equipment, personal care products, and household items aims to lower the tax burden on commonly used goods.
Exam Point: Agricultural equipment previously taxed at 12%–18% is taxed at 5% under GST 2.0. Personal care and hygiene products listed above have also moved from 18% to 5%.
Level 3: Items with 18% GST
The 18% GST slab covers automobiles, motorcycles, transport vehicles, home appliances, and electronic products. Several products that were previously taxed at 28% have been brought under the 18% GST rate.
| Item/Category | Items | Previous GST Rate | New GST Rate |
|---|---|---|---|
| Automobiles | Petrol and petrol-hybrid, LPG and CNG cars not exceeding 1,200 cc and 4,000 mm | 28% | 18% |
| Automobiles | Diesel and diesel-hybrid cars not exceeding 1,500 cc and 4,000 mm | 28% | 18% |
| Automobiles | Three-wheeled vehicles | 28% | 18% |
| Motorcycles | Motorcycles of 350 cc and below | 28% | 18% |
| Transport Vehicles | Motor vehicles used for the transport of goods | 28% | 18% |
| Home Appliances | Air conditioners | 28% | 18% |
| Electronics | Televisions above 32 inches, including LED and LCD TVs | 28% | 18% |
| Electronics | Monitors and projectors | 28% | 18% |
| Home Appliances | Dishwashing machines | 28% | 18% |
Under this slab, the GST rate on the listed automobiles, electronics, and home appliances has been reduced from 28% to 18%.
Exam Point: Small petrol and hybrid cars up to 1,200 cc and 4,000 mm, diesel and diesel-hybrid cars up to 1,500 cc and 4,000 mm, and motorcycles of 350 cc and below attract 18% GST under the given GST 2.0 structure.
Level 4: Items with 40% GST
The 40% GST slab is the highest tax level under GST 2.0. It mainly covers luxury, leisure, and specified high-tax items.
| Item/Category | Items | Previous GST Rate | New GST Rate |
|---|---|---|---|
| Luxury & Leisure | Private helicopters, private airplanes, alcohol, beer, wine, soft drinks, superbikes, large cars, tobacco, cigarettes, pan masala, yachts and luxury items | 28%–30% | 40% |
The highest GST rate of 40% is applicable to the listed luxury and leisure products. These items were previously taxed at rates ranging from 28% to 30%.
Exam Point: The 40% GST slab is the highest slab in the given GST 2.0 structure and mainly covers luxury and leisure items.
Key Exam Points
- GST 2.0 has four major tax levels: 0%, 5%, 18%, and 40%.
- 0% GST applies to listed essential food products and stationery items.
- 5% GST mainly covers medical, agricultural, personal care, dairy, household, and baby-care items.
- Listed agricultural equipment has been reduced from 12%–18% to 5%.
- Listed personal care and hygiene products have moved from 18% to 5%.
- Several automobiles, motorcycles, electronics, and home appliances have moved from 28% to 18% GST.
- Motorcycles of 350 cc and below attract 18% GST.
- The highest GST 2.0 slab is 40%.
- The 40% GST rate mainly applies to listed luxury and leisure items.
Quick Revision Summary
| GST Slab | Major Items |
|---|---|
| 0% | Daily food items, individual items, life insurance and stationery |
| 5% | Medical items, agriculture equipment, personal care, dairy, household and baby-care items |
| 18% | Automobiles, motorcycles, transport vehicles, electronics and home appliances |
| 40% | Luxury and leisure items |
Remember: GST 2.0 Slab Structure = 0% → Essential Items | 5% → Common & Priority Items | 18% → Automobiles & Appliances | 40% → Luxury & Leisure Items.