GST rate changes for the year 2019-2020

Last Updated at: January 28, 2020
190
GST rate changes for the year 2019-2020

Catalogue for the blog ‘GST rate changes’:

  • What is GST?
  • Components of GST
  • GST rate changes in different parts of the year 2019
  • Evolution of GST

 

The Goods and Services Act, which was passed in the Parliament in 2017, is one of the most significant reforms of India. Its journey began in 2000 when a committee was set up to draft the law. However, it got passed in 2017 in both the Houses. The Goods and Service Tax (GST) means one indirect tax for the entire nation. It has eliminated the tax applied on the taxes, thus decreasing the additional cost on the goods.

Components of GST

There are three types of taxes applied under GST:-

CGST– Collected by Central Government on an intra-state sale.

SGST– Collected by State Government on an intra-state sale.

IGST– Collected by Central government on inter-state sale.

GST rate changes in different parts of the year 2019 

Since the onset of GST, there have been multiple changes in the GST rates of the various commodities and services. The financial year 2019-20 also saw numerous changes in the GST rates of multiple items. Here are the highlights of the same:-

GST rate changes in the 36th council meeting held at New Delhi on 27th July 2019 

The following are the rate changes for the 36th GST Council meeting:

  1. The GST rates on all-electric vehicles were reduced from 12 % to 5 %.
  2. Also, GST rates on chargers or charging stations for electric vehicles were reduced from 18 % to 5 %.
  3. GST exemption was given to the electric buses (carrying capacity more than 12 passengers) hired by local authorities. 

GST rate changes in the 37th council meeting held at Goa on 20th September 2019 

Given below are the rates revision decided in the 37th GST Council meeting:

Products 

Before 

After 

Parts of Slide Fasteners  18 % 12%
Marine Fuel  0.5 % (FO) 18 % 5 %
Wet Grinders (including stone as grinder) 12 % 5%
Dried Tamarind, Plates and Cups made of leaves/flowers/bark) 5 %  NIL
Cut and Polished semi-precious stones 3 % 0.25 %
Specific goods for petroleum operations taken under HELP)  Applicable rates  5 %
Goods like railway wagons, coaches, rolling stock (without refund of accumulated ITC) 5 % 12 %
Caffeinated Beverages  18 % 28 % + 12 % compensation cess
Polyethylene/polypropylene woven and non- woven bags 5 %/ 12 % / 18 % Uniform 5 % rate
Pulley, wheels and other parts and used as parts of agricultural machinery. 18 % 12 % for the period 1.07.2017 to 31.12.2018
Get Online GST Registration

Specific exemptions were also given to the following:

  • Imports of specific Defence goods not manufactured indigenously up to 2024.
  • Supply of goods and services to the Food and Agriculture Organization for specific projects.
  • Fishmeal for the period 01.07.17 to 30.09.19.
  • Supply of goods and services to FIFA and other persons for organizing under-17 Women’s Football World Cup.
  • Supply of Silver/Platinum by specified nominated agency to exporters for exports of Jewellery.

GST rate changes in the 38th GST council meeting held at New Delhi on 18th December 2019

Under the guidance of the Union Minister for Finance and corporate affairs Smt. Nirmala Sitharaman, the following exemptions in GST were announced:- 

    • From 1st January 2020, the upfront amount payable for long term lease of industrial/ financial infrastructure plots by an entity having 20% or more ownership of Central or State Government would be exempted. Earlier, this was applicable only to those Central or State Government entities having 50 % or more ownership. 
    • From 1st march 2020, a single GST rate would be applicable on @28 % on both State-run and state-authorized lotteries. 
  • From 1st January 2020, a uniform GST rate of 18 % would be applicable on all woven and non- woven bags and sacks of polyethylene or polypropylene strips or the like, whether laminated or non-laminated of a kind used in the packing of goods (HS code 3923/6305). 

Evolution of GST 

The table below shows a comparative study of the revenue trends, GST rate structures, and the reduction in GST rates since the initiation of GST.

  • GST rates were initially calculated on RNR basis.
  • A number of items rates were lower than RNR rates.
  • Items placed under 28% slab had pre- GST incidence in excess of 31 %.
  • Items like toothpaste, mineral water, soap etc. were kept in 18 % slab.
  • The threshold limit increased to Rs. 40 lakhs in goods.
  • The composition limit increased from Rs. 75 lakhs to Rs. 1.5 crore.
  • The composition rates were lowered from 12% to 1% for the manufacturers.
  • The composition scheme was extended to Services too.

 

 GST rate changes for the year 2019-2020

190

Catalogue for the blog ‘GST rate changes’:

  • What is GST?
  • Components of GST
  • GST rate changes in different parts of the year 2019
  • Evolution of GST

 

The Goods and Services Act, which was passed in the Parliament in 2017, is one of the most significant reforms of India. Its journey began in 2000 when a committee was set up to draft the law. However, it got passed in 2017 in both the Houses. The Goods and Service Tax (GST) means one indirect tax for the entire nation. It has eliminated the tax applied on the taxes, thus decreasing the additional cost on the goods.

Components of GST

There are three types of taxes applied under GST:-

CGST– Collected by Central Government on an intra-state sale.

SGST– Collected by State Government on an intra-state sale.

IGST– Collected by Central government on inter-state sale.

GST rate changes in different parts of the year 2019 

Since the onset of GST, there have been multiple changes in the GST rates of the various commodities and services. The financial year 2019-20 also saw numerous changes in the GST rates of multiple items. Here are the highlights of the same:-

GST rate changes in the 36th council meeting held at New Delhi on 27th July 2019 

The following are the rate changes for the 36th GST Council meeting:

  1. The GST rates on all-electric vehicles were reduced from 12 % to 5 %.
  2. Also, GST rates on chargers or charging stations for electric vehicles were reduced from 18 % to 5 %.
  3. GST exemption was given to the electric buses (carrying capacity more than 12 passengers) hired by local authorities. 

GST rate changes in the 37th council meeting held at Goa on 20th September 2019 

Given below are the rates revision decided in the 37th GST Council meeting:

Products 

Before 

After 

Parts of Slide Fasteners  18 % 12%
Marine Fuel  0.5 % (FO) 18 % 5 %
Wet Grinders (including stone as grinder) 12 % 5%
Dried Tamarind, Plates and Cups made of leaves/flowers/bark) 5 %  NIL
Cut and Polished semi-precious stones 3 % 0.25 %
Specific goods for petroleum operations taken under HELP)  Applicable rates  5 %
Goods like railway wagons, coaches, rolling stock (without refund of accumulated ITC) 5 % 12 %
Caffeinated Beverages  18 % 28 % + 12 % compensation cess
Polyethylene/polypropylene woven and non- woven bags 5 %/ 12 % / 18 % Uniform 5 % rate
Pulley, wheels and other parts and used as parts of agricultural machinery. 18 % 12 % for the period 1.07.2017 to 31.12.2018
Get Online GST Registration

Specific exemptions were also given to the following:

  • Imports of specific Defence goods not manufactured indigenously up to 2024.
  • Supply of goods and services to the Food and Agriculture Organization for specific projects.
  • Fishmeal for the period 01.07.17 to 30.09.19.
  • Supply of goods and services to FIFA and other persons for organizing under-17 Women’s Football World Cup.
  • Supply of Silver/Platinum by specified nominated agency to exporters for exports of Jewellery.

GST rate changes in the 38th GST council meeting held at New Delhi on 18th December 2019

Under the guidance of the Union Minister for Finance and corporate affairs Smt. Nirmala Sitharaman, the following exemptions in GST were announced:- 

    • From 1st January 2020, the upfront amount payable for long term lease of industrial/ financial infrastructure plots by an entity having 20% or more ownership of Central or State Government would be exempted. Earlier, this was applicable only to those Central or State Government entities having 50 % or more ownership. 
    • From 1st march 2020, a single GST rate would be applicable on @28 % on both State-run and state-authorized lotteries. 
  • From 1st January 2020, a uniform GST rate of 18 % would be applicable on all woven and non- woven bags and sacks of polyethylene or polypropylene strips or the like, whether laminated or non-laminated of a kind used in the packing of goods (HS code 3923/6305). 

Evolution of GST 

The table below shows a comparative study of the revenue trends, GST rate structures, and the reduction in GST rates since the initiation of GST.

  • GST rates were initially calculated on RNR basis.
  • A number of items rates were lower than RNR rates.
  • Items placed under 28% slab had pre- GST incidence in excess of 31 %.
  • Items like toothpaste, mineral water, soap etc. were kept in 18 % slab.
  • The threshold limit increased to Rs. 40 lakhs in goods.
  • The composition limit increased from Rs. 75 lakhs to Rs. 1.5 crore.
  • The composition rates were lowered from 12% to 1% for the manufacturers.
  • The composition scheme was extended to Services too.

 

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