India’s Goods and Services Tax (GST), introduced in 2017, replaced a complex web of central and state taxes with a single nationwide system. Initially, GST had five major slabs: 0%, 5%, 12%, 18%, and 28% (plus cess).
The 12% slab was a mid-tier rate, applied to essential but not core-basic items — like dairy, packaged foods, stationery, and intermediate industrial goods.
But, with the GST 2.0 reforms (effective Sept 22, 2025), India moved towards simplification. The Council decided to merge the 12% and 28% slabs, leaving just 0%, 5%, 18%, and 40%
Rationalization of GST Slabs After Sept 2025
The GST Council simplified India’s tax framework in September 2025. Here’s how the old slabs were consolidated into the new system.
| Old GST Slabs (Pre-2025) | New GST Slabs (Post-2025) | Notes |
| 0% | 0% (Exempt/Nil Rated) | Essentials like milk, education, and life-saving drugs |
| 5% | 5% (Merit Rate) | Most daily-use items, packaged foods, and medicines |
| 12% | Abolished Items shifted to 0%, 5%, or 18% | Dairy, stationery, and fertilizers were redistributed |
| 18% | 18% (Standard Rate) | General goods & services, textiles above ₹2,500 |
| 28% (+ cess) | 40% (Luxury/Demerit) | Luxury cars, aerated drinks, betting/gambling |
Key takeaway: 12% is gone. Items were either reduced (to 0% or 5%) or increased (to 18%) depending on classification.
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What Happened to Items Previously Taxed at 12%?
The big question for businesses and consumers: where did all the 12% items go? Let’s break it down into categories.
The Council applied three different treatments:
- Downshifted to 5%: essential daily-use items.
- Reduced to 0% (exempt): education & life-saving goods.
- Shifted to 18%: industrial & high-value categories.
1. New GST Rate Cut from 12% to 5%
Most daily essentials and industrial inputs became more affordable after being shifted to the 5% Merit Rate.
| Previous Rate | New Rate (2025) | Examples |
| 12% | 5% | Pens, printed books, and recorded media reproductions |
| 12% | 5% | Packaging containers, cartons, boxes |
| 12% | 5% | Renewable energy devices (solar cookers, heaters) |
| 12% | 5% | Railway goods & spare parts |
| 12% | 5% | Vehicles modified for disabled persons |
| 12% | 5% | Butter, Ghee, Cheese, Dairy spreads |
| 12% / 18% | 5% | Packaged food items (biscuits, namkeen, pasta, cornflakes) |
| 12% / 18% | 5% | Utensils, bicycles, kitchenware |
| 12% | 5% | Apparel & footwear priced ≤ ₹2,500 |
| 12% / 18% | 5% | Jams, sauces, pickles, soups |
| 12% | 5% | Dry fruits & nuts (almonds, cashews, pistachios) |
| 12% | 5% | Fertilizers, drip irrigation, sprinklers |
| 12% | 5% | Medical-grade oxygen |
| 12% | 5% | Diagnostic kits, glucometers, test strips |
| 12% | 5% | Corrective spectacles, goggles |
| 12% | 5% | Sewing machines, baby feeding bottles, and diapers |
| 12% | 5% | Job work (umbrellas, pharma, leather, bricks) |
| 12% | 5% | Paper & board packaging, pouches, biodegradable bags |
Suggested Read: 5% GST Item List
2. New GST Rate Cut from 12% to 0%
Some critical goods, especially in education and healthcare, were made completely tax-free for the benefit of consumers.
| Previous Rate | New Rate (2025) | Examples |
| 12% | 0% | Maps, charts, globes |
| 12% | 0% | Pencils, sharpeners, crayons, pastels |
| 12% | 0% | Notebooks, exercise books |
| 12% | 0% | Advanced biotech medicines |
| 12% | 0% | 33 life-saving drugs listed by the GST Council |
| 12% | 0% | Uncoated paper for lab notebooks, graph books |
| 18% / 12% | 0% | Individual health & life insurance premiums |
Suggested Read: 0% GST Item List
3. New GST Rate Hiked from 12% to 18%
Certain higher-value goods and industrial-use products were moved up to the 18% slab to balance revenue needs.
| Previous Rate | New Rate (2025) | Examples |
| 12% | 18% | Dissolving-grade chemical wood pulp |
| 12% | 18% | Paper & board (other than exempt notebook paper) |
| 12% | 18% | Apparel & textiles > ₹2,500 |
| 12% | 18% | Quilts & quilted textiles > ₹2,500 |
| 12% | 18% | Air passenger transport (non-economy classes) |
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Reasons for Removal of 12% Slab After GST Reforms 2025
The Council’s decision wasn’t arbitrary; here’s why the 12% slab had to go and how it benefits both taxpayers and the government.
The GST Council aimed for simplification and affordability:
- Ease of compliance: fewer slabs reduce disputes & errors.
- Support for consumers: essentials shifted to lower rates.
- Balanced revenue: high-value & industrial items moved to 18%.
- Encouraging growth sectors → renewable energy, fertilizers, and dairy are now cheaper.
Suggested Read: 18% GST Item List
New GST Structure After Sept 2025
The post-reform GST structure is much leaner and easier to follow. Here’s the new four-slab framework at a glance.
| Slab | Applicability | Examples |
| 0% (Exempt) | Core essentials | Milk, books, medicines, insurance |
| 5% (Merit Rate) | Daily-use items | Packaged foods, dairy, fertilizers, diagnostic kits |
| 18% (Standard) | General goods & services | Consumer electronics, apparel > ₹2,500 |
| 40% (Luxury/Demerit) | Luxury/sin goods | Premium cars, aerated drinks, and betting |
Also Read: GST on Daily Essentials
Conclusion
With the 12% slab gone, India has moved towards a simpler, more transparent GST system that reduces costs on essentials while keeping luxury goods taxed higher.
The 12% GST slab is history in India. Under GST 2.0 reforms, items once taxed at 12% have been restructured:
- Down to 5%: dairy, packaged foods, fertilizers, medical devices.
- To 0%: notebooks, life-saving drugs, insurance.
- Up to 18%: higher-value textiles, industrial pulp, non-economy airfare.
This rationalization simplifies GST compliance and reduces household costs on essentials, while ensuring the government maintains a tax revenue balance.
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