India’s Goods and Services Tax (GST) has entered a new phase with the rollout of GST 2.0, effective from 22 September 2025. The reform is designed to simplify the indirect tax structure, rationalize slabs, and reduce the burden on consumers and businesses.
A key change lies in the HSN-wise (Harmonised System of Nomenclature) GST rate restructuring. Many goods that were earlier taxed at higher slabs are now shifted to lower rates, while luxury and de-merit goods face higher rates. Understanding the old vs new rates across HSN codes is crucial for manufacturers, traders, retailers, and even end consumers.
This article provides a comprehensive HSN-wise comparison of old and new GST rates, explains the rationale behind the changes, and highlights what sectors benefit most from GST 2.0.
Overview of GST 2.0 Rate Structure
Before GST 2.0, India had four main slabs: 5%, 12%, 18%, and 28%, along with cess on certain goods. This led to confusion, frequent classification disputes, and compliance challenges.
Under GST 2.0:
- The 12% slab has been removed. Items under this slab have largely moved to 5%.
- Most goods under the 28% slab are shifted to 18%, except for luxury and sin goods.
- A new 40% de-merit slab has been created for products like tobacco, liquor, luxury vehicles, and premium imports.
- Essentials remain at 0% or 5%, reducing household expenditure.
- Only two broad slabs (5% and 18%) now cover the majority of goods.
HSN-Wise Old vs New GST Rate List
Below is a structured comparison of important goods and services by HSN categories, showing old GST rates vs new GST rates under GST 2.0.
1. Food & Beverages (HSN 01–22)
| HSN Chapter / Goods | Old GST Rate | New GST Rate |
|---|---|---|
| Dairy products (milk powder, paneer, cheese) | 12% | 5% |
| Butter, ghee, packaged cream | 12%–18% | 5% |
| Packaged snacks, namkeens, biscuits | 12% | 5% |
| Packaged drinking water | 18% | 5% |
| Tea, coffee, cocoa products | 12% | 5% |
| Alcoholic beverages (for human consumption) | Outside GST earlier (state taxed) | 40% under de-merit slab |
2. Personal Care & Household Products (HSN 33–34)
| HSN Chapter / Goods | Old GST Rate | New GST Rate |
|---|---|---|
| Soap, shampoos, detergents | 18% | 5% |
| Toothpaste, toothbrushes, shaving cream | 18% | 5% |
| Cosmetics & beauty products | 18% | 5% |
| Diapers, sanitary napkins | 12%–18% | 5% |
| Toys & baby products | 12% | 5% |
3. Textiles, Apparel & Footwear (HSN 50–64)
| HSN Chapter / Goods | Old GST Rate | New GST Rate |
|---|---|---|
| Cotton yarn, fabrics | 5% / 12% | 5% |
| Readymade garments up to ₹2,500 | 5% | 5% (unchanged) |
| Readymade garments above ₹2,500 | 12% | 5% |
| Footwear up to ₹2,500 | 5% | 5% (unchanged) |
| Footwear above ₹2,500 | 18% | 5% |
4. Healthcare & Medical Supplies (HSN 30–32)
| HSN Chapter / Goods | Old GST Rate | New GST Rate |
|---|---|---|
| Life-saving drugs & vaccines | 5% | 0% (exempt) |
| Medical devices & diagnostic kits | 12% | 5% |
| Spectacles, lenses | 12% | 5% |
| Health insurance | 18% | 0% (exempt under GST 2.0) |
5. Electronics & Consumer Durables (HSN 84–85)
| HSN Chapter / Goods | Old GST Rate | New GST Rate |
|---|---|---|
| Televisions (up to 32 inch) | 18% | 18% (unchanged) |
| Televisions (above 32 inch) | 28% | 18% |
| Refrigerators, washing machines, ACs | 28% | 18% |
| Mobile phones | 18% | 12% |
| Laptops, computers | 18% | 12% |
6. Automobiles (HSN 87)
| HSN Chapter / Goods | Old GST Rate | New GST Rate |
|---|---|---|
| Small cars (hatchbacks, compact SUVs) | 28% + cess | 18% |
| Two-wheelers up to 350cc | 28% | 18% |
| Luxury cars & SUVs | 28% + cess | 40% |
| Electric vehicles | 5% | 5% (unchanged) |
7. Construction & Household Materials (HSN 68–70)
| HSN Chapter / Goods | Old GST Rate | New GST Rate |
|---|---|---|
| Cement | 28% | 18% |
| Tiles, sanitary ware | 28% | 18% |
| Paints, varnishes | 28% | 18% |
| Glass & mirrors | 18% | 12% |
8. Services (Miscellaneous HSN)
| Service Category | Old GST Rate | New GST Rate |
|---|---|---|
| Restaurants (non-AC) | 5% | 5% (unchanged) |
| Restaurants (AC) | 18% | 5% |
| Hotels below ₹7,500/night | 12% | 5% |
| Hotels above ₹7,500/night | 18% | 12% |
| Salons, gyms, spas | 18% | 5% |
| Online food delivery charges | 18% | 18% (unchanged) |
Key Highlights of HSN-Wise Changes
- Massive relief for households – Essentials like soap, toothpaste, dairy products, and packaged food now attract just 5% GST.
- Healthcare gets priority – Medical devices, diagnostic kits, and even health insurance are either exempt or in the lowest slab.
- Boost for textiles and footwear – Items that were taxed at 12% or 18% now mostly fall under 5%, benefiting middle-class consumers.
- Electronics and white goods cheaper – Washing machines, refrigerators, TVs above 32 inches, and ACs move from 28% to 18%.
- Automobiles restructured – Affordable cars and bikes get cheaper, while luxury vehicles face a 40% slab.
- Construction sector benefits – Cement, tiles, paints, and sanitary ware shift from 28% to 18%, reducing real estate costs.
- Luxury and sin goods penalised – Cigarettes, alcohol, luxury cars, and premium imports now fall under the 40% de-merit slab.
Impact on Consumers and Businesses
- Consumers: Daily shopping bills, healthcare expenses, and utility purchases will get significantly cheaper. Middle-class families stand to benefit the most.
- Businesses: Simplified slabs reduce classification disputes and compliance costs. FMCG, textile, automobile, and real estate industries will gain momentum.
- Government: While revenue from luxury goods may increase, the government expects higher compliance and consumption to balance reduced rates.
Conclusion
The introduction of GST 2.0 marks a turning point in India’s tax regime. By simplifying slabs and restructuring rates HSN-wise, it reduces household costs, encourages industrial growth, and strengthens tax compliance.
While essentials and middle-class products are now more affordable, the government has ensured that luxury consumption and de-merit goods face higher taxes. This balance between relief and revenue makes GST 2.0 both consumer-friendly and fiscally responsible.
Businesses and individuals must carefully review the HSN-wise old vs new GST rate list to update their billing systems, pricing models, and compliance practices before the new system takes full effect.