The Indian Goods and Services Tax (GST) system witnessed a major overhaul after the 56th GST Council meeting, introducing the GST 2.0 reforms effective September 22, 2025. The earlier structure with five slabs (0%, 5%, 12%, 18%, 28%) has been simplified into four:
- 0% (Exempt): Essential items and services
- 5% (Merit Rate): Daily-use products and affordable services
- 18% (Standard Rate): Default slab for most goods and services
- 40% (Demerit Rate): Luxury and sin goods
The 18% GST rate is now the Standard Rate, covering a majority of goods and services. Many products that were earlier taxed at 28%, like electronics, small cars, and household appliances, were shifted down to 18% to boost affordability and reduce compliance burdens.
This blog presents a detailed list of goods and services under the 18% GST Standard Rate as of September 22, 2025, along with the policy logic behind the changes.
18% GST on Consumer Durables & Electronics
The government rationalized the tax rates on household appliances and electronics, moving them from the highest slab (28%) into the Standard Rate (18%) to encourage consumption.
| Category | Description | Previous GST Rate | New GST Rate (Effective Sept 22, 2025) |
| Major Appliances | Air conditioners, televisions (LED/LCD > 32″), refrigerators, washing machines | 28% | 18% |
| Household Electronics | Dishwashing machines, monitors, projectors, TV reception devices | 28% | 18% |
| Batteries | Electric accumulators (excluding lithium-ion) | 28% | 18% |
| Personal Use Articles | Dutiable personal-use articles | 28% | 18% |
| IT & Office Equipment | Printers, computers, capital goods, intermediate goods | 18% | 18% |
| Mobile Phones | Smartphones and feature phones | 18% | 18% |
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18% GST on Automobiles & Transportation Goods
Automobiles, which were earlier heavily taxed, saw a significant rationalization. Small cars, motorcycles, and auto parts were moved from 28% to 18%.
| Category | Description | Previous GST Rate | New GST Rate |
| Small Cars (Petrol) | ≤1200 cc engine, length ≤4000 mm | 28% + 1–3% cess | 18% |
| Small Cars (Diesel) | ≤1500 cc engine, length ≤4000 mm | 28% | 18% |
| Hybrid Cars | Small hybrids meeting thresholds | 28% | 18% |
| Two/Three Wheelers | Motorcycles (≤350 cc), three-wheelers | 28% | 18% |
| Commercial Vehicles | Buses, trucks, ambulances | 28% | 18% |
| Auto Components | Parts, chassis, cabs, accessories | 28% | 18% |
| Engines | Petrol & diesel piston engines (non-aircraft) | 28% | 18% |
| Tyres | Pneumatic tyres (rubber, excluding tractor/aircraft) | 28% | 18% |
| Large Tractors | Road tractors for semi-trailers (>1800 cc) | 28% | 18% |
| Seats | Motor vehicle seats | Likely 28% | 18% |
Also Read: GST on Automobiles | New GST Rates on Cars | New GST Rates on Two-Wheelers
18% GST on Construction, Mining, & Industrial Inputs
Several industrial goods that were previously overtaxed or part of inverted duty structures were streamlined under the 18% slab.
| Category | Description | Previous GST Rate | New GST Rate |
| Construction Materials | Portland cement, hydraulic cements | 28% | 18% |
| Mining | Coal, briquettes, lignite, peat, solid fuels | 5% | 18% |
| Paper Pulp | Dissolving-grade chemical wood pulp | 12% | 18% |
| Printing/Writing Paper | Uncoated paper/board (except exercise-book paper) | 12% | 18% |
18% GST on Textiles, Tobacco & Miscellaneous Goods
High-value textiles and tobacco products were rationalized, with clear thresholds based on price.
| Category | Description | Previous GST Rate | New GST Rate |
| High-Value Apparel | Clothing & accessories > ₹2,500 per piece | 12% | 18% |
| Quilted Textiles | Quilts, quilted textiles > ₹2,500 per piece | 12% | 18% |
| Tobacco | Bidi (basic handmade tobacco product) | 28% | 18% |
| Menthol Products | Menthol and derivatives (except natural) | 12% | 18% |
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Services Taxed at 18%
The 18% rate is the default for most services. Many previously taxed at 12% were shifted upward.
| Category | Service | Previous GST Rate | New GST Rate |
| Air Travel | Passenger air transport (non-economy classes) | 12% | 18% |
| Rail/Multimodal Transport | Container goods transport (non-railways), multimodal transport | 12% | 18% |
| Pipeline Transport | Transport of petroleum crude, natural gas, ATF, diesel | 18% | 18% |
| Petroleum Services | Technical, business, drilling, exploration | 12% | 18% |
| Construction Services | Offshore oil & gas exploration contracts | 12% | 18% |
| Job Work (Residual) | Job work not otherwise specified | 12% | 18% |
| Local Delivery | Courier/postal delivery (SAC 996813) | 18% | 18% |
| GTA Services | Goods transport by GTA | 18% | 18% |
Suggested Read: 0% GST Items List, 5% GST Item List & 12% GST Slab Items
Why the 18% GST Slab Matters
The 18% GST slab plays a crucial role in GST 2.0:
- It balances affordability and revenue, keeping essentials at 0% or 5% and general goods at 18%.
- It reduces the tax burden on middle-class items, like small cars and electronics, previously at 28%.
- It corrects inverted duty structures, moving some 12% items up to 18% to remove disputes.
- It serves as the default standard rate for services, ensuring uniform taxation and easier compliance.
Conclusion
The 18% GST slab is the backbone of GST 2.0, serving as the default rate for a wide range of goods and services. By shifting essentials to 0% and 5% and luxuries to 40%, the GST Council strategically positioned 18% as the fair middle ground.
This rationalization makes appliances, small cars, and industrial goods more affordable, while keeping revenue steady. For businesses, it simplifies compliance; for consumers, it ensures greater clarity and fairness in pricing.
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