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June 14, 2026
The Dispatch

Definition

GST Slabs

GST slabs are the multiple tax-rate categories under GST into which goods and services are classified, ranging from nil-rated essentials to higher rates on luxury and sin goods.

Unlike a single-rate GST, India uses a multi-slab structure so that essential items attract little or no tax while luxury and demerit goods bear higher rates. Some sensitive items also carry a compensation cess on top. The aim is to balance revenue needs with affordability of necessities.

The multiplicity of slabs has drawn criticism for creating classification disputes and complexity. The GST Council periodically reviews and reshuffles rates, and there is a long-running debate about rationalising the number of slabs to simplify the system without hurting revenue.

Related terms

  • HSN CodeThe HSN code is an internationally standardised system of numbers used to classify goods, adopted under GST to determine the applicable tax rate.
  • GST CouncilThe GST Council is the constitutional body that decides the rates, exemptions and rules of GST through consensus between the Centre and the states.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.