GST Rates in India 2026: Complete HSN Code Guide

India's Goods and Services Tax underwent its most significant overhaul since launch when the GST Council implemented the GST 2.0 reform on September 22, 2025. The old four-slab rate structure has been replaced with a cleaner, more logical framework designed to reduce classification disputes, simplify compliance, and better align tax rates with the nature of goods and services.

Whether you are a business owner filing returns, an accountant preparing invoices, or a consumer trying to understand what tax you are paying, this guide covers the updated GST rate slabs, how HSN and SAC codes work, and practical tools you can use to look up the correct code for any product or service.

The New GST Rate Structure (Post GST 2.0)

The September 2025 reform rationalized the earlier 5%, 12%, 18%, and 28% slab system. The 12% slab, which had long been criticized for creating unnecessary classification disputes, was merged upward into 18%. The 28% slab was replaced with a steeper 40% rate specifically targeting luxury and sin goods. The result is a four-tier system that draws clearer lines between categories.

Old vs New: Visual Comparison

To understand the scale of the change, here is a side-by-side look at how the rate slabs shifted under GST 2.0.

The most notable changes: the entire 12% bracket was eliminated. Products like processed foods, certain textiles, and mid-range electronics that sat at 12% have been moved either down to 5% or up to 18% depending on their classification. Meanwhile, the 28% rate, which previously covered some items that were arguably not luxury goods, has been tightened into a 40% rate that explicitly targets sin and luxury categories like tobacco and high-end vehicles.

What is an HSN Code?

HSN stands for Harmonized System of Nomenclature, an internationally standardized system developed by the World Customs Organization (WCO) to classify traded goods. Over 200 countries use HSN codes for customs and trade purposes, making it the common language of international commerce.

In the context of Indian GST, every product is assigned an HSN code that determines its applicable tax rate. India uses an 8-digit HSN code system for GST, extending the international 6-digit standard with two additional digits for more granular classification.

HSN Code Requirement on Invoices

Non-compliance with HSN code requirements can result in invoice rejection by the buyer, inability to claim Input Tax Credit (ITC), and penalties during GST audits. Getting the correct HSN code is not optional; it is a core compliance requirement.

How HSN Codes Are Structured

An HSN code is built in layers, each adding specificity. Understanding the structure helps you navigate the system and find the right code even when you do not have it memorized.

The first two digits identify the chapter in the HSN schedule. India's GST tariff has 98 chapters covering everything from live animals (Chapter 01) to works of art (Chapter 97). Each subsequent pair of digits narrows the classification until you reach the 8-digit tariff item that maps directly to a specific GST rate.

SAC Codes for Services

While HSN codes classify goods, services are classified using SAC (Service Accounting Codes). SAC codes are 6-digit numbers that always begin with 99, making them easy to distinguish from HSN codes at a glance.

Some commonly used SAC codes include:

• 9954 — Construction services (building, civil engineering, installation)
• 9971 — Financial and related services (banking, insurance, securities)
• 9983 — Other professional, technical and business services (IT, consulting)
• 9963 — Accommodation, food and beverage services (hotels, restaurants)
• 9964 — Passenger transport services
• 9973 — Leasing or rental services

Service providers must use the appropriate SAC code on invoices in the same way that goods suppliers use HSN codes. The same turnover-based digit requirements apply. You can look up SAC codes using the DoAide HSN and SAC Search tool, which covers both goods and services classifications.

Common HSN Codes and GST Rates

Below is a reference table of frequently looked-up HSN codes along with their applicable GST rates under the post-reform structure. For a comprehensive and searchable database, use the DoAide HSN Search.

Note that some products carry dual rates depending on branding, packaging, or value. For example, unbranded fresh meat at a local market attracts 0% GST, while packaged and branded meat products attract 5%. Similarly, textiles like t-shirts may fall under 5% or 18% depending on their sale value. Always verify using the specific 8-digit HSN code for your product.

The 18% Standard Rate: What Falls Under It

The 18% slab is by far the broadest, covering the majority of goods and services in the economy. Key items in this bracket include:

• Electronics and appliances: Air conditioners, televisions, refrigerators, washing machines, dishwashers, printers, batteries
• Vehicles: Small cars, motorcycles up to 350cc, commercial vehicles, auto parts
• Building materials: Cement, iron, steel
• Services: IT services, consulting, financial services, all restaurants (non-AC and AC merged into one rate), hotels with room tariff between ₹1,000 and ₹7,500

The merger of AC and non-AC restaurant rates under a single 18% slab has been one of the more consumer-visible changes from the reform. Previously, non-AC restaurants charged 5% while AC restaurants charged 18%, leading to confusion and occasional disputes.

How to Find the Correct HSN Code

Finding the right HSN or SAC code is a task every GST-registered business faces. Here are the most reliable methods.

GST Tools for Businesses

Beyond HSN code lookup, businesses regularly need tools for GST calculation, GSTIN verification, and compliance checks. DoAide provides a suite of free tools designed for daily use.

• GST Calculator — Calculate GST-inclusive and GST-exclusive amounts instantly. Supports all rate slabs including the new 40% rate. Useful for invoicing, quoting, and quick price calculations.
• HSN/SAC Code Search — Look up any HSN or SAC code with the applicable rate, description, and classification details. Covers the complete 2026 tariff schedule.
• GSTIN Lookup — Verify the GST registration status of any business by entering their GSTIN. Essential before entering into B2B transactions to ensure ITC eligibility.
• All GST Tools — The complete DoAide GST toolkit with additional features for rate comparison, reverse charge lookup, and compliance checklists.

Special Categories Worth Noting

Several product and service categories have specific rules that differ from the main slab structure:

• Economy hotel rooms (₹1,000 to ₹7,500 tariff): Taxed at 5%, making budget travel relatively affordable under GST.
• Surgical instruments and diagnostic kits: Classified at 5% to keep healthcare costs accessible.
• Agricultural machinery and fertilizers: Kept at 5% to support the farming sector.
• Spectacles and lenses: 5% rate applies, ensuring affordable eye care.
• Carbonated beverages: Certain carbonated drinks fall under the 40% slab alongside tobacco, reflecting their classification as sin goods.