GST Rates in India 2026: Cement, Laptops, Cars, Mobiles & HSN Guide

GST rates decide your selling price, your margin and your input credit, and they change more often than most business owners expect. This guide covers the current GST rate structure in India, the rates on the items people search for most such as cement, laptops, cars, mobile phones and medicines, how to read an HSN code correctly, and how to make sure the rate applied on your invoice is right every single time by configuring it once in Busy Software.

The GST rate structure in India

GST in India operates on a multi-slab structure. The principal slabs are 0 percent, 5 percent, 12 percent, 18 percent and 28 percent, with a compensation cess on a narrow set of demerit and luxury goods, plus special rates of 0.25 percent and 3 percent for rough precious stones and gold respectively. The design logic is broadly progressive: essential goods sit at nil or 5 percent, mass-consumption items at 12 and 18 percent, and luxury or sin goods at 28 percent plus cess.

Rates are applied through HSN codes for goods and SAC codes for services. The classification, not the product name, determines the rate. That is why two visually similar products can carry different rates, and why a wrong HSN is a tax exposure rather than a clerical slip.

GST rates on commonly searched goods

GST on cement

Cement has historically sat in the highest slab at 28 percent, a rate the construction industry has argued against for years because it feeds directly into housing cost. Portland cement, aluminous cement, slag cement and similar hydraulic cements fall under HSN 2523. Related construction inputs differ: bricks and blocks often attract 5 or 12 percent depending on type, sand attracts 5 percent, and steel bars fall at 18 percent. A builder therefore deals with four different rates on a single site, which is precisely the situation where item-level rate mapping in software pays for itself.

GST on laptops and computers

Laptops, desktops and personal computers fall under HSN 8471 and attract 18 percent GST. Monitors up to a specified size, keyboards, mice and printers largely follow the same 18 percent treatment. Because IT equipment is usually a business input, registered buyers can claim full input tax credit, meaning the effective cost to a GST-registered business is the pre-tax price. Always collect a proper B2B tax invoice carrying your GSTIN for any hardware purchase, because a retail bill without your GSTIN forfeits the credit permanently.

GST on mobile phones

Mobile phones and chargers attract 18 percent GST under HSN 8517. The rate was raised from 12 percent to correct an inverted duty structure where inputs were taxed higher than the finished product and manufacturers accumulated unusable credit. Accessories vary, because cases and covers, earphones and power banks each have their own classification, so a phone retailer cannot apply one blanket rate to the whole bill.

GST on cars and motor vehicles

Motor vehicles sit at 28 percent plus a compensation cess that varies by engine capacity, length and fuel type. Small petrol cars carry a lower cess, small diesel cars a slightly higher one, and mid-size, large and SUV categories carry progressively higher cess rates. Electric vehicles are a deliberate outlier at 5 percent with no cess, part of the policy push toward electrification. Because cess is a separate levy with its own credit rules, an automobile dealer's invoice format and ledger structure must handle cess as a distinct line rather than folding it into the tax rate.

GST on medicines and healthcare

Life-saving drugs and certain specified medicines attract nil or 5 percent GST. Most formulations sit at 12 percent, while some products such as nicotine gum sit at 18 percent. Medical devices vary widely. Healthcare services provided by a clinical establishment are exempt, but that exemption creates a credit problem, because an exempt supplier cannot claim input credit on purchases. This is why hospitals track taxable and exempt streams separately from day one.

GST on paints, textiles and food

Paints and varnishes are at 18 percent. Textiles are split, with fabric and lower-priced apparel at 5 percent and higher-priced apparel at 12 percent. Unbranded and unpackaged staple foods are largely nil-rated, while branded, packaged versions of the same commodity attract 5 percent. Restaurant services are generally 5 percent without input tax credit, or 18 percent with credit for restaurants located in specified premises. Food businesses often get this wrong because the same rice can be nil-rated loose and 5 percent packaged.

How to read an HSN code

An HSN code is hierarchical. The first two digits identify the chapter, the next two the heading, the next two the sub-heading, and further digits give national-level detail. Reporting requirements depend on turnover: taxpayers with aggregate turnover up to Rs 5 crore report four digits on B2B invoices, and those above Rs 5 crore report six digits on all invoices. Getting the digit count wrong is itself a reporting defect, separate from getting the rate wrong.

Reverse charge, exempt and nil-rated are three different things

Business owners routinely conflate three distinct categories. Nil-rated supplies carry a zero rate but remain taxable supplies, so related credit rules apply in a particular way. Exempt supplies are outside the charge and block input credit. Non-GST supplies such as petrol and alcohol are outside GST entirely. Reverse charge is different again, because the supply is taxable but the recipient pays the tax instead of the supplier. Mis-categorising these distorts your GSTR-1 tables and your credit reversal working.

Applying the right rate automatically in Busy Software

The reliable way to get rates right is to stop deciding them at billing time. In Busy Software, GST rate and HSN are attributes of the item master rather than of the invoice. Configure once and every voucher inherits the correct treatment.

• Set HSN or SAC and the tax rate on each item master, or at item-group level for whole categories.
• Use slab-wise rates where a product's rate depends on sale value, such as apparel above and below a price point, so Busy applies the correct slab based on rate per unit.
• Configure cess separately for goods that carry it, so the cess line is computed and reported independently.
• Mark reverse-charge purchases at party or item level so the liability posts to the right ledger automatically.
• Use effective-date rate changes so a notification applying from a given date does not retrospectively alter older invoices.
• Run the HSN summary report before filing to confirm rate-wise totals match your books.

When the GST Council revises a rate you update the master once and Busy applies it to every subsequent invoice, while historical vouchers keep the rate that was legally correct on their date. That is exactly the behaviour auditors expect to see.

What to do when a rate changes mid-transaction

The time of supply rules decide which rate applies when rates change. The determining factors are the date of supply, the date of invoice and the date of payment, and two of the three decide the outcome. If goods were supplied before a rate change but invoiced and paid after, the new rate applies. If supplied and invoiced before but paid after, the old rate applies. Keep clean dates on vouchers, because in a rate-change month those dates are the entire argument.

Practical rate hygiene for Indian SMEs

• Audit your item masters once a quarter, because a wrong HSN on a fast-moving item multiplies quickly.
• Never let a billing operator override the rate at voucher level; restrict it with user rights.
• Reconcile the HSN summary with your sales register before every GSTR-1 filing.
• Watch GST Council notifications for your sector and diarise the effective date, not the announcement date.
• Keep a written classification note for any product where the rate is genuinely arguable, because it is the difference between a penalty and a defensible position.

Rates are the visible part of GST; classification discipline is the part that actually protects you. Software cannot make the classification decision for you, but it can make sure the decision you took is applied consistently across every invoice, every branch and every user.