Launch offer — 25% off with code LAUNCH-25 See plans →
Microlesson · 5-min read

Rates of GST – Goods and Services

# Rates of GST

## A. GST Rates for GOODS

1. Seven CGST rates notified: 0.125%, 0.75%, 1.5%, 2.5%, 6%, 9%, and 14% — with equivalent SGST/UTGST on intra-State supplies.

2. Seven IGST rates for goods: 0.25%, 1.5%, 3%, 5%, 12%, 18%, and 28%.

3. Certain specified goods are exempt (Nil-rated) — listed in exemption notifications.

## B. GST Rates for SERVICES

1. Six CGST rates: 0.75%, 2.5%, 3.75%, 6%, 9%, and 14% — with equivalent SGST/UTGST.

2. Six IGST rates for services: 1.5%, 5%, 7.5%, 12%, 18%, and 28%.

3. Nil-rate for certain specified services.

4. 28% rate applies to services like:

  • Gambling,
  • Entertainment events,
  • Amusement facilities (e.g., casinos, IPL events, race clubs).

5. 5% rate applies to certain services, including:

  • GTA service (without full ITC),
  • Restaurant service (subject to no ITC).

6. Default rate (residuary) — services not covered under any specific heading are taxed @ 18% (CGST 9% + SGST 9% or IGST 18%).

## Quick Reference

Common Rate (IGST)Typical Examples
0% / NilEssential goods, certain healthcare/education services
5%GTA (RCM), restaurants (non-AC/AC general), economy class flights
12%Processed food, business class, GTA (forward, with ITC)
18%Default rate; most services and goods
28%Luxury, sin goods, gambling, race clubs, IPL events

## Why the Rate Structure Matters

  • Rate selection drives liability, ITC eligibility (in some cases), invoice format and consumer pricing.
  • Some 5% services come with restricted/no ITC — supplier should evaluate the trade-off vs. higher rates with full ITC (e.g., GTA 5% vs 12%, motor vehicle renting 5% vs 12%).

Worked example

### Example 1

Example 1 (Default): A consulting service does not appear in any specific rate heading → taxed @ 18% IGST (or 9% CGST + 9% SGST).

### Example 2

Example 2 (5% with restriction): A GTA opts for 5% — it cannot avail full ITC on inputs (only restricted ITC of input services in same line of business).

### Example 3

Example 3 (28% luxury): Tickets to an IPL match are taxed @ 28% as entertainment events.

### Example 4

Example 4 (Restaurant): Standalone restaurant services @ 5% with no ITC; restaurant in 'specified premises' (hotel tariff > ₹7,500/day) @ 18% with ITC.

⚠️ Common exam mistakes

  • Defaulting to 18% without first checking if the goods/service falls in a specific rate notification entry.
  • Choosing 5% rate option for GTA/motor vehicle renting without realising the ITC restriction.
  • Forgetting that intra-State CGST + SGST combined = total IGST rate (e.g., 9% + 9% = 18% IGST).
Reference: — Rate Notifications under CGST/IGST Act (e.g., Notification 1/2017-CTR, 11/2017-CTR and amendments)
Now that you've read this — what's next?
Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.
Start 15-min diagnostic