India GST Guide for 2026: Rates, Registration & Compliance
India runs a multi-rate GST with main slabs of 5% and 18%, plus 40% on luxury and sin goods. This guide explains registration thresholds, the CGST/SGST/IGST split, e-invoicing, and return filing for domestic and foreign sellers.
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Key Takeaways
India's Goods and Services Tax (GST) was simplified under the GST 2.0 reform effective September 22, 2025, collapsing most old slabs into 5% and 18% (with a 40% rate reserved for luxury and sin goods); SaaS, IT, and OIDAR services fall in the 18% slab. A business registers once aggregate turnover exceeds INR 40 lakh for goods or INR 20 lakh for services (lower in special-category states), and registration is mandatory regardless of turnover for inter-state suppliers of goods. Many essentials, healthcare, and education are exempt or taxed at 5%; exports are zero-rated.
Taxability Snapshot
SaaS
Taxable (18%)
Digital Goods
Taxable (18%)
Sales Tax Rates
India's Goods and Services Tax (GST) was simplified under the GST 2.0 reform effective September 22, 2025. The many old slabs collapsed mainly into 5% and 18%, with a 40% rate reserved for luxury and sin goods. SaaS, IT, and OIDAR services fall in the 18% slab. GST is administered by the CBIC and GST Network; interstate and imported supplies attract IGST.
Rate | Applies to |
|---|---|
5% | Essentials and many mass-use items |
18% | Standard rate, including SaaS and IT services |
40% | Luxury and sin goods |
0% / exempt | Many essentials, healthcare, education |
Registration & nexus threshold
India uses GST registration thresholds rather than US-style economic nexus. A business must register once aggregate turnover exceeds INR 40 lakh for goods or INR 20 lakh for services, with lower limits of INR 20 lakh and INR 10 lakh in special-category states [6]. Registration is mandatory regardless of turnover for inter-state suppliers of goods and for non-resident providers of online information and database access or retrieval (OIDAR) services to Indian consumers [6]. Registration steps are in the How to Register section.
Filing frequency & deadlines
Domestic businesses file GSTR-1 and GSTR-3B monthly or quarterly. Foreign OIDAR providers file GSTR-5A monthly, due the 20th of the following month. Note that GST returns cannot be filed more than three years after the due date.
Exemptions
Many essentials, healthcare, and education are exempt or taxed at 5%, and exports are zero-rated. SaaS, IT services, and OIDAR services are taxable at 18% (IGST for cross-border supplies).
Penalties
Penalties under Section 122 are the higher of 10% of the tax due or ₹10,000 for non-fraud cases, rising to 100% of the tax for fraud or evasion. OIDAR late fees run ₹200 per day (₹100 for nil returns).
Sources
[2] Press Information Bureau — GST on textiles and apparel (5% up to INR 2,500 per piece; 18% above)
[3] Press Information Bureau — GST on food items (basic staples nil-rated)
[5] GST Portal — Returns (GSTR-1, GSTR-3B, GSTR-9, OIDAR GSTR-5A, input tax credit)
[6] Central Board of Indirect Taxes and Customs — GST registration thresholds
[7] Central Board of Indirect Taxes and Customs — GST (audits and appeals)
Verified July 2026 against Press Information Bureau, GST Council, and Central Board of Indirect Taxes and Customs guidance.
Frequently asked questions
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