What changed, in short
| Before | After (most items) | Note |
|---|---|---|
| 5% | 5% | Many items unchanged; some moved to nil |
| 12% | 5% | The 12% slab was removed; most items moved to 5% |
| 18% | 18% | The standard rate |
| 28% | 18% | The 28% slab was largely removed; most items moved to 18% |
| — | 40% | A special rate for a short list, such as tobacco products |
The rate for each item is in the Schedules of Notification No. 09/2025–Central Tax (Rate), listed by HSN code. Look yours up on the CBIC GST site.
Why the price on the shelf did not simply fall
The effect on your invoice depends on whether you price ex-tax or tax-inclusive. These are illustrations of the arithmetic.
| Item moving from 12% to 5% | Ex-tax price fixed at ₹10,000 | Tax-inclusive price fixed at ₹11,200 |
|---|---|---|
| Taxable value | ₹10,000 | ₹11,200 ÷ 1.05 = ₹10,667 |
| GST | ₹500 (was ₹1,200) | ₹533 |
| Customer pays | ₹10,500 (was ₹11,200) | ₹11,200 |
If you hold the ex-tax price, the customer pays less. If the price is tax-inclusive, such as a printed MRP, your taxable value rises instead. The same logic applies to a 28% to 18% move. Decide which way each price list works and change it on purpose.
The billing checklist
- Update the GST rate on every item by HSN code, using the notification, and not by guess.
- Apply the new rate to invoices on and after 22 September 2025. Invoices dated before it keep the old rate; work out how advances and returns that straddle the date are treated.
- Review price lists: for each, is the price ex-tax or tax-inclusive?
- Look at stock bought at the old rate and the input tax credit effects on it.
- Fix credit notes and sales returns for supplies made before the change.
- Check the item master for wrong or missing HSN codes, which a rate change exposes.
- Regenerate or check e-invoices and e-way bills if the rate changed after generation, and follow the cancellation and amendment rules.
While you are at it: the e-invoice time limit
E-invoicing applies from ₹5 crore of aggregate turnover. Taxpayers with aggregate turnover of ₹10 crore and above cannot report an invoice to the IRP more than 30 days after its date, a limit that applies from 1 April 2025, so a rate correction made late can be blocked. Read GST e-invoicing explained and the rules on the e-invoice portal.
Doing this in software
In SME ERP, the GST rate sits on the item and its tax template, e-invoice and e-way bill are generated from the same invoice, and stock and accounts post together, so a rate change is made in one place and reflected in invoices, the ledger and the GST figures. Try the GST calculator, which handles 5%, 18% and 40% with the CGST/SGST or IGST split.
Frequently asked questions
What are the GST rates after 22 September 2025?
Most goods and services moved to 5% or 18%, with a 40% rate for a short list. The 12% slab was removed and the 28% slab largely so. Goods rates are in Notification No. 09/2025–Central Tax (Rate), services changes in No. 15/2025, both dated 17 September 2025.
Do I need to change old invoices?
No. Invoices dated before 22 September 2025 keep the old rate. Advances and returns that straddle the date need a decision; have your CA confirm the treatment.
What is the 30-day e-invoice limit?
For taxpayers with aggregate turnover of ₹10 crore and above, an e-invoice cannot be reported to the IRP more than 30 days after the invoice date, from 1 April 2025.
Practical, India-specific guides from the team behind WebSoftOS cloud ERP, by Ridhi Technologies, Zirakpur, Punjab.