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GST Rates - Short Review


                               GST Rates 

Rates for GST decided in 14th GST council meeting has been held on 18.05.2017, and the GST Council convened to fix and finalize the much awaited GST rates for 1211 goods across 98 categories. The very next day, the council reconvened to finalize the GST rates for 36 categories for services.
To begin with, Hasmukh Adhia, Revenue Secretary, Ministry of Finance, Government of India has stated – that nearly 81% of the items will be classified at 18% GST rate slab and lower; while the remaining 19% will be taxed at 28% and above.
Here’s what you need to know about some of the main goods and services, classified across the 5 GST tax slabs.

Exempted from GST

  • Poultry Products – Fresh Meat, Fish, Chicken, Eggs
  • Dairy Products – Milk, Curd, Butter Milk, Jaggery (Gur), Lassi, unpacked Paneer
  • Fresh Fruits & Vegetables
  • Food Items – Natural Honey, Flour (Atta & Maida), Pulses, Basmati Rice, Gram Flour (Besan), Bread, Vegetable Oil, Religious Sweets (Prasad), Common Salt
  • Cosmetics & Accessories – Bindi, Vermillion (Sindoor), Bangles
  • Stationery – Stamps, Judicial Papers, Printed Books, Newspapers
  • Handloom Products
  • Textile – Jute, Silk
  • Contraceptives
  • Hotel Services priced at less than INR 1000
  • Education (exemption continued from before)
  • Healthcare (exemption continued from before)

GST at 5%

  • Dairy Products – Skimmed Milk Powder, Milk food for babies, Condensed milk, Packaged Paneer, Cream
  • Frozen Vegetables
  • Food Items – Sugar, Spices, Edible Oil, Pizza Bread, Rusk, Sweets, Fish Fillets, Tapioca (sabu daana)
  • Beverages – Coffee, Tea, Juices
  • Apparel – below 1000 INR
  • Footwear – below 500 INR
  • Fuel – Kerosene, LPG, Coal
  • Solar Panels
  • Common Utilities – Broom
  • Medical Goods – Medicines, Stents
  • Newsprint
  • Lifeboats
  • Textile – Cotton, Natural Fibre, and yarns
  • Railway Travel
  • Economy Class Air Travel
  • Cab Aggregators (e.g. Uber & Ola)

GST at 12%

  • Dairy Products – Butter, Cheese, Ghee
  • Packaged Dry Fruits
  • Food Items – Snacks (Namkeen & Bhujia), Packaged Chicken, Sausages
  • Beverages – Fruit Juices, Packed Coconut Water
  • Apparel – above 1000 INR
  • Personal Hygiene – Tooth Powder
  • Stationery – Colouring Books, Picture Books
  • Common Utilities – Sewing Machine, Umbrella
  • Ayurvedic Medicine
  • Incense Sticks (Agarbatti)
  • Mobile Phones
  • Non-AC Hotels & Restaurants
  • Business Class Air Travel

GST at 18%

  • Dairy Products – Ice Cream
  • Preserved Vegetables
  • Food Items – Flavoured refined sugar, Pasta, Corn Flakes, Pastries, Cakes, Jams, Sauces, Soups, Instant Food Mixes, Processed Foods
  • Beverages – Mineral Water
  • Branded Garments
  • Footwear – above 500 INR
  • Personal Hygiene – Tissues, Toilet Paper, Hair Oil, Soap Bars, Toothpaste
  • Stationery – Note Books, Envelopes, Fountain Pens
  • Electronic Equipment – Printed Circuits, Monitors
  • Iron & Steel Products
  • Biri wrapper leaves (Tendu Patta)
  • Biscuits
  • Textile – Man-made fiber and yarn
  • AC Hotels & Restaurants that serve liquor
  • Telecom Services
  • IT Services
  • Financial Services
  • Works Contract

GST at 28%

  • Food Items – Chocolates, Chewing Gum, Custard Powder
  • Beverages – Aerated Water
  • Personal Hygiene – Deodorants, Shaving Cream, After Shave, Hair Shampoo, Dye, Sunscreen, Perfume, Face Creams, Detergents
  • White Goods – Vacuum Cleaner, Shavers, Hair Clippers, Washing Machines, Dish Washers, Water Heaters & other Home Appliances
  • Speakers
  • Cameras
  • Automobiles & Motor Vehicles*
  • Housing Materials – Paint, Wallpaper, Ceramic Tiles, Cement
  • Weighing Machines, Vending Machines, ATM
  • Fireworks
  • Luxury / Demerit Goods* – Pan Masala, Tobacco, Bidis, Aerated Drinks & Motor Vehicles
  • Rooms and Restaurants in 5-star hotels
  • Race course betting
  • Cinema etc.
*Note – Luxury / Demerit Goods as listed above will also attract a compensation cess over and above the GST rate of 28%

Articles outside the GST Tax Rate Slabs

  • Gold, gems, jewelry – 3%
  • Rough Diamonds – 0.25%

Treatment of Luxury / Demerit Goods

In addition to the rates which have been fixed for major categories of goods and services, the GST council has approved the compensation rates for 5 luxury/demerit items. The proceeds of this cess will go into the compensation fund which would be used to bridge any tax revenue gap for states in the first five years of GST.
The items that will be levied with the compensation cess, over and above the GST rates which are applicable on them are as follows:
ItemsGST Rate ApplicableApproved Cess RangeCess Ceiling
Coal5%INR 400 / tonneINR 400 / tonne
Pan Masala28%60%135%
Tobacco28%61% – 204%INR 4170 / thousand
Aerated Drinks28%12%15%
Motor Vehicles**28%1% – 15%15%
**Note – The cess will be 15% for cars with over 1500 cc engine capacity, other sports and luxury cars. The cess will be 1% for smaller cars.

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