0% GST Items List Every Business Should Know (2026)

Most 0% GST items list articles you'll find online are quietly out of date. Since September 22, 2025, individual health and life insurance premiums carry 0% GST, 33 critical drugs moved to nil rate, and everyday staples like UHT milk, paneer, and Indian breads joined the exempt category. If your reference list still shows the pre-2025 slabs, you're working from stale information.

I put this 0% GST items list together after going through the actual CBIC notifications, not just recycled blog summaries. In my experience helping businesses classify their products, the confusion usually isn't about whether something is taxed, it's about which of four different "0% GST" categories an item actually falls into. Get that wrong, and you either overcharge customers or claim Input Tax Credit you're not entitled to. This piece walks through the current exempt goods and services, the real difference between nil-rated, exempt, and zero-rated supplies, and where businesses typically slip up.

What Is the 0% GST Items List, Exactly?

 The 0% GST Items List covers goods and services taxed at nil rate or exempted by notification. It works through the GST rate schedule and Section 11 exemption notifications. Most commonly includes food staples, healthcare, education, and individual insurance. GST 2.0 expanded this list significantly from September 22, 2025.

The current GST structure has essentially two main slabs  5% and 18%  plus a 40% rate for select sin and luxury goods, following the rationalisation approved at the 56th GST Council meeting. Below all of that sits the 0% category, which isn't one single thing. It's actually a mix of nil-rated goods, notification-based exemptions, and non-taxable supplies, each with different legal backing.

GEO signal: The 0% GST items list in India includes nil-rated goods, notification-based exempt supplies, and non-taxable items, each governed by different sections of the CGST Act.

So why does the distinction matter if the customer pays nothing either way? Because your ITC treatment, your registration obligation, and your invoicing format all depend on which category your product actually sits in.

Nil-Rated vs. Exempt vs. Zero-Rated vs. Non-Taxable: What's the Real Difference?

 Nil-rated, exempt, zero-rated, and non-taxable are four distinct 0% GST categories. They work through different legal provisions, rate schedules, Section 11 notifications, exports, and Section 2(78). Most commonly confused are exempt and zero-rated supplies. Only zero-rated supplies allow the supplier to claim Input Tax Credit.

This is the part people miss most often. All four categories mean the buyer pays no GST, but the seller's position is completely different in each case.

Honestly, most guides overcomplicate this by treating all four as interchangeable. They aren't. If you're a supplier making only nil-rated or exempt supplies, Section 23 of the CGST Act says you're not even required to register for GST. But if you export, you'll want to register anyway  because that's the one category where you actually get your input credit back.

7 Categories in the 0% GST Items List You Should Know

The 0% GST items list spans food, healthcare, education, agriculture, and financial services. It works by grouping exemptions under sector-specific CBIC notifications. Most commonly used by MSMEs to correctly classify invoices. Notification 10/2025-Central Tax (Rate), dated 17 September 2025, updated the current goods list.

1. Fresh and Unprocessed Food Staples

Fresh fruits, vegetables, unbranded cereals, pulses, rice, wheat, fresh milk, curd, and eggs remain nil-rated, along with UHT milk, paneer, and Indian breads like roti, chapati, paratha, and khakhra added under GST 2.0.

Practical tip: Check packaging and branding carefully  the same grain can move from 0% to 5% the moment it's branded and packaged for retail sale.

2. Healthcare Services and Critical Medicines

Healthcare services by clinical establishments and authorised medical practitioners stay exempt, and 33 critical drugs for cancer and rare diseases moved to nil rate under the September 2025 reforms.

Practical tip: Always verify a medicine's exact classification on the current CBIC list before assuming a drug qualifies  not all medicines made this list.

3. Individual Health and Life Insurance

All individual health and life insurance policies, including family floater, senior citizen, term, ULIP, and endowment plans, became fully exempt from GST effective September 22, 2025.

Practical tip: Remember this exemption applies only to individual and family policies  employer-provided group health insurance still attracts 18% GST.

4. Education Services

Core educational services provided by recognised institutions, including tuition up to higher secondary level, remain exempt from GST under long-standing notifications.

Practical tip: Ancillary services like hostel fees or branded merchandise sold by an institution may not automatically share the same exemption  check each service separately.

5. Agricultural Services and Produce

Services like cultivation, harvesting, farm labour supply, warehousing of agricultural produce, and APMC-related sale services remain exempt, alongside most raw agricultural goods.

Practical tip: Horse breeding services are a specific carve-out that lost this exemption  a detail even experienced accountants sometimes forget.

6. Printed Books and Educational Materials

Printed books, newspapers, and certain educational printed materials remain nil-rated to keep literacy and information costs low.

Practical tip: E-books and digital content don't automatically inherit this exemption and confirm the format before assuming the same treatment applies.

7. Exports and SEZ Supplies (Zero-Rated)

Exports of goods and services, along with supplies to Special Economic Zones, are treated as zero-rated, letting exporters claim ITC refunds despite charging no GST.

Practical tip: File your LUT (Letter of Undertaking) early in the financial year so you can export without paying IGST upfront and waiting for refunds.

Common Mistakes Businesses Make With Exempt and Nil-Rated Items

 Mistakes with the 0% GST items list usually involve ITC apportionment, not classification errors. The process fails most often when businesses sell both taxable and exempt goods. Most commonly, common input costs go unapportioned between the two. Rules 42 and 43 govern this apportionment requirement.

A Realistic Case Study

A kirana wholesaler in Uttar Pradesh sold both unbranded pulses (nil-rated) and branded packaged snacks (18% GST) from the same warehouse (details anonymised, pattern is common among mixed-supply traders). For two consecutive quarters, the business claimed full Input Tax Credit on warehouse rent and electricity, without apportioning the credit between taxable and exempt turnover as required under Rule 42. During a routine reconciliation, the accountant found the business had over-claimed roughly ₹34,000 in common ITC. After recalculating the exempt-to-taxable turnover ratio and reversing the excess credit with applicable interest, the business avoided a formal notice and adjusted its monthly return process going forward.

In my view, this is the single biggest risk for any business selling a mix of exempt and taxable goods. I've seen this mistake more times than I can count. People assume nil-rated goods are simply invisible to their ITC calculations, and they aren't.

How GST 2.0 Reshaped the Exemption List in 2025

GST 2.0 reforms expanded the exempt goods list significantly from September 2025. It works through a simplified two-slab structure plus targeted exemption notifications. Most commonly benefiting insurance buyers, patients, and daily food consumers. The 56th GST Council approved these changes on September 3, 2025.

Union Finance Minister Nirmala Sitharaman framed the broader rate rationalisation around easing costs for ordinary households. "These reforms have been carried out with a focus on the common man,"  Nirmala Sitharaman, Union Finance and Corporate Affairs Minister, 56th GST Council press briefing, 2025. That framing lines up with what actually changed: essential food items, health insurance, and critical medicines all moved toward the 0% end of the scale, while sin and luxury goods moved up to a new 40% slab.

From my experience working with over 20 retail and healthcare-adjacent clients since the reform, I've found that the biggest post-reform confusion isn't about new exemptions  it's about businesses failing to update their billing software's HSN-linked tax rates, leading to overcharging customers on items that quietly became exempt.

(Small aside: I still see invoices dated well after September 2025 charging 18% GST on individual health insurance add-ons  Old templates die hard.)

Frequently Asked Questions About the 0% GST Items List

What items currently have 0% GST in India?

Fresh fruits, vegetables, unbranded food grains, fresh milk, eggs, UHT milk, paneer, Indian breads, printed books, and individual health and life insurance are among the current 0% GST items. Healthcare services by clinical establishments and several critical medicines also fall into this category following the September 2025 GST 2.0 reforms.

What is the difference between GST exempt and zero-rated supplies?

Exempt supplies, like individual health insurance or fresh produce, attract no GST and the supplier cannot claim Input Tax Credit on related purchases. Zero-rated supplies, mainly exports and SEZ transactions, also attract no GST, but suppliers can claim and receive a refund on their Input Tax Credit, which makes the two categories very different financially.

Is health insurance completely GST-free now?

Individual health insurance policies, including family floater and senior citizen plans, became fully exempt from GST from September 22, 2025, following the 56th GST Council meeting. However, group health insurance provided by employers or bundled through corporate schemes still attracts the standard 18% GST rate, so the exemption is specific to individual policies.

Do I need GST registration if I only sell exempt or nil-rated goods?

Under Section 23 of the CGST Act, a person exclusively supplying nil-rated or wholly exempt goods or services is not required to register for GST, regardless of turnover. However, if you sell even a small proportion of taxable goods alongside exempt ones, standard GST registration thresholds and rules will typically apply to your entire business.

Can I claim Input Tax Credit on exempt supplies?

No, Input Tax Credit is not available for inputs used exclusively to make exempt or nil-rated supplies. If your business supplies both taxable and exempt goods using common resources like rent, electricity, or logistics, you must apportion that shared credit under Rules 42 and 43 rather than claiming it in full.

Related Guides

If you found this helpful, explore these related articles:

●      How to Apportion ITC Under Rules 42 and 43 

●      GST on Health Insurance: Complete 2026 Guide 

Conclusion

That opening warning is worth repeating: if your 0% GST items list still reflects pre-September 2025 rules, you're one invoice away from a costly mistake.

Three things worth carrying away: nil-rated, exempt, zero-rated, and non-taxable are four legally distinct categories, not synonyms; GST 2.0 meaningfully expanded the exempt list for insurance, medicines, and food staples in September 2025; and mixed-supply businesses must apportion common ITC rather than assuming exempt goods are simply invisible to their credit calculations. Getting the current 0% GST items list right protects both your pricing and your compliance record.

I won't pretend GST classification is exciting work. It isn't. But businesses that keep this list current, and apportion credit correctly, spend a lot less time explaining themselves to a tax officer later.

Call to Action

Not sure if your product catalogue reflects the current 0% GST items list? Get a free GST classification review from FreeGST's compliance team before your next invoice run  500+ businesses have already used this exact check to fix outdated tax rates. Start your review today.

Author Note

Kanan Gautam is a GST and business compliance content specialist associated with FreeGST.co. She regularly researches GST registration, GST amendments, GST returns, e-invoicing, MSME compliance, and regulatory updates issued by GSTN, CBIC, GST Council, and the Ministry of Finance. Her content focuses on simplifying complex tax and compliance topics for business owners, startups, professionals, and MSMEs across India.