The Ministry of Finance has issued Notification No. 9/2025-Integrated Tax (Rate), revising the Integrated Goods and Services Tax (IGST) rates applicable on inter-State supplies of goods across India. The changes, notified on September 17, 2025, replace the earlier framework set under Notification No. 01/2017-Integrated Tax (Rate) dated June 28, 2017.
Key Highlights of the New IGST Structure
According to the notification, different categories of goods will now attract tax under the following slabs:
- 5% IGST - Essential commodities such as live horses, dairy products, dried legumes, rice, wheat, spices, edible oils, medicines and renewable energy devices.
- 18% IGST - Processed food items, packaged consumer goods, industrial chemicals, electrical appliances, textiles beyond the basic threshold, and most manufactured products.
- 28% IGST - Luxury goods and items deemed non-essential.
- 40% IGST - Specific goods falling under Schedule III (primarily sin goods or items classified as high-tax).
- Other concessional rates - 3% (precious metals), 0.25% (rough diamonds) and 1.5% (specified goods under Schedule VI).
Impact on Businesses and Consumers
The revised rates aim to simplify the indirect tax structure while balancing government revenue with affordability for consumers. Essential household staples including pulses, rice, wheat, edible oils and medicines remain in the lower 5% bracket, ensuring limited burden on common households.
On the other hand, processed foods, packaged products, electronics and industrial goods mostly fall under the standard 18% slab, aligning with the global average for indirect taxes. High-end items and luxury products continue to draw the steepest levy at 28% and above.
Conclusion
The new GST rate notification is expected to bring stability and predictability to India's indirect tax regime. Businesses engaged in inter-State supply of goods are advised to review the revised schedules carefully and align their invoicing, compliance and pricing strategies accordingly.
Official copy of the notification has been attached
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