The 56th GST Council meeting introduced the biggest change to India's tax structure since GST launched in 2017. Effective 22 September 2025, the system moved from four main slabs to a simpler set. If you run a business, here is what actually matters for your invoices and filings.
The new GST slabs
India now runs on four rates: 0%, 5%, 18%, and 40%. The old 12% and 28% slabs were removed. Most items that were at 12% dropped to 5%, and most items at 28% dropped to 18%. A new 40% rate applies only to a narrow set of luxury and 'sin' goods.
What moved where
- 12% items mostly moved down to 5% — a direct saving for consumers.
- 28% consumer durables (TVs, ACs, fridges, washing machines) moved down to 18%.
- A new 40% slab covers tobacco, pan masala, aerated drinks, luxury cars, and similar demerit goods.
- Niche rates stay: 3% on gold and jewellery, 0.25% on rough diamonds.
What you must do as a business
- Update your billing software so new invoices use the correct current rate — any invoice issued at 12% after 22 Sep 2025 is incorrect and can attract penalties.
- Review your item master and re-map each product to its new slab.
- For old stock bought at 12%, still bill the customer at the new rate — the rate follows the date of sale, not purchase.
- If you billed a customer at the wrong rate by mistake, issue a credit note and a corrected invoice, and reflect it in your GSTR-1.
How BizGST Pro handles this
BizGST Pro already uses the current 0/5/18/40 slabs in every invoice. Items still saved at 12% or 28% are flagged with an 'old slab' warning so you can update them in seconds. New invoices are always compliant by default.