GSTTaxation

What are the different rates of GST in India?

The Goods and Services Tax was introduced to replace numerous indirect taxes. This article helps understand everything about the various GST rates and their impact.

 The Goods and Services Tax (GST) reform revolutionized how taxes on goods and services were imposed. The earlier pattern of taxation involved the payment of indirect taxes at every point of the manufacturing process. This proved to be highly burdensome. The GST number check  was introduced to charge a uniform tax rate. This helps prevent corruption and also promotes curbs tax evasion. T

he GST reform was introduced in 2014, and its key objective was to eliminate the prevailing trade barriers between the various States of India. GST helped bring within its fold various indirect taxes, some of which include Value Added Tax (VAT), Luxury Tax, Central Sales Tax (CAT), Entertainment Tax, Service Tax, Entry Tax as well as Excise Duty, among others.

GST rates have helped establish a consistent set of benefits, starting from the manufacturers to the retail point of sale. This makes the end-consumer bear the said tax. GST rates are categorized as follows:

  • State Goods and Services Tax (SGST) – This is regulated by the SGST Act, whereby the said State government levies taxes on the transaction of goods and services within the State
  • Central Goods and Services Tax (CGST) – The Central Government governs this, and taxes are levied on the transactions of goods and services within a State. However, the Central government earns tax revenues
  • Integrated Goods and Services Tax (IGST) – Taxes are charged on the transactions of goods and services within the State. In this case, the taxes earned are shared by the State as well as the Central Government
  • Union Territory Goods and Services Tax (UGST) – The respective Union Territories of India levy taxes on all transactions made within their geographical territory.

Let Us Understand the GST Rate Structure for Goods and Services Under 5%, 12%, 18% & 28%.

The following table outlines some of the goods and services under the different tax slabs. These are subject to changes as per the GST Council’s regulations.

5% 12% 18% 28%

Life-saving drugs

Oil

Sugar

Tea & Coffee (not instant variety)

Traditional Indian sweets

Coal

Cashew and Cashew nuts (shell variety)

Agarbatti

Kites, Numismatic coins, coir mats, Braille appliances, walking sticks,

Processed foods Computers

Menthol and menthol crystals, mentha oil

Diagnostic kits

Exercise books

Notebooks

Intraocular lens

Corrective spectacles

Cutlery like forks, spoons, playing cards, carom board

Diesel engines, two-way radio walky-talky, all goods made from natural cork

 

Toothpaste, soaps, hair oil.

Capital goods

Industrial intermediaries

Kajal pencils

Dental wax

Headgear

Tarpaulin (plastic)

Handbags made of plastic/jute/cotton

Aluminium foil

Concrete pipes (pre-cast)

Weighing machinery excluding electronic variety

Ball and Roller bearings, as well as related items

Industrial electronics

Transformers

Wheel rim – Rear tractor

Set-top box (for television)

CCTV

Computer monitors (up to 17 inches only)

Bamboo furniture

Television sets (Up to 32 inches)

Power banks functioning on lithium batteries

Sports goods

Pneumatic rubber tires – re-treaded variety

All goods with an HS-code 8483 d

All luxury items, namely:

Air-conditioners

Refrigerators,

Cars – Premium & small-sized ones

Premium motorbikes

Aerated drinks

Cigarettes

 All semi-polished and Cut-stones (jewellery) attract a 0.25% GST tax rate.

What are the Latest GST Tax Slab Rates for Goods?

The GST Council revises the GST slab rates of the various goods and services at regular intervals. The latest GST rates for the Goods category are as follows:

  • Food & Beverage products: Goods levied with a 12% GST rate are now charged only 5% tax. The category which had to pay 18% in the past will now pay only 12%. The goods which were levied with a 28% tax rate will now be levied with a tax rate of 18% only
  • Household goods: The products charged 18% earlier now come under the 12 or 5% tax slab. The ones charged 28% GST in the past are now liable to pay only 18% or 5%, depending on the category specified by the GST Council
  • Educational goods: Those who were charged with a 28% GST rate will now pay only 12%
  • Agriculture products: The GST rate of 12% in these products is now reduced to 5%, and the 18% tax slab has been reduced to 12%
  • Infrastructure/ Environment and Fuel related goods: The 28% tax slab has been reduced to 18%, and the 18% tax slab has been reduced to 12%
  • Security & Safety related goods: The tax slabs remain unchanged
  • Miscellaneous: The 28% tax slab has been brought down to 18%, the 18% tax slab has been revised to 12%, and the 5% tax slab has become nil.

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Impact of the GST Rate Change That Has Come into Effect from 1st January 2022

  • Introduction of new HSN codes from 2022: According to the Central Board of Indirect Taxes & Customs (CBIC), all harmonized System of Nomenclature (HSN) codes have aligned with the seventh edition of the Harmonized System nomenclature (HS-2022)
  • Corrections of inverted tax structure: For all textiles bearing HSN codes 51-58, 60, 63 and 64, the GST tax slab has been increased from 5% to12%. This applies to embroidery work-related goods; saree falls, home furnishings, knitted fabrics, curtains, knitting, dyeing services as well as bed linen
  • Footwear – The above increase also applies to all footwear bearing the HSN code 64 and whose cost per pair is less than or equal to 1000
  • E-commerce: Under Section 9 (5) of the GST rule, all e-Commerce operators have to pay for services related to carriage and cabs pertaining to transporting passengers. This includes transport like motor vehicles as well as an omnibus facility. All cloud-kitchen e-commerce services will come under the purview of this section and are liable to pay the requisite GST tax rate. However, GST does not apply in the case of hotel accommodation and services, where the tariff per unit is less than 7500 or equal to the same
  • Other areas impacted: The earlier tax rate of 12% under HSN code 8713 in the case of carriages for challenged individuals has been removed completely. The 18% tax slab in the case of Information Technology software (entry 452P) has also been removed.
  • A GST rate of 12% is applicable to the HSN code (Chapter 4414). In the past, this was 44140000 and applied to wooden frames that include photographs and paintings.

 

You can use our GST calculator to know how much GST you owe before you register.

What are the Different GST Rate Revisions After 28th GST Council Meeting?

The 28th GST Council meeting was held towards the end of July 2018. This introduced a revision of the tax slab for 45 different products and 2 Services. The details of the same are as follows:

S.No. Name of the product Previous tax rate New tax rate
1 Rakhis (excluding the semi-precious variety) 18% NA
2 Sanitary pads 12% NA
3 Coins – in circulation and the commemorative variety 5% NA
4 Brooms – only raw materials 12% NA
5 Deities made of wood, marble or stone 5% NA
6 Products made of Sal leaves 18% NA
7 Khali dona (leaf container) 18% NA
8 Compost – coir pith 5% NA
9 Fabrics under 5801 as well as Chenille 12% 5%
10 Dhurries – Handloom variety 12% 5%
11 Fertilizer-grade phosphoric acid 12% 5%
12 Carpets – handmade, Coverings, Textile floorings 12% 5%
13 Headwear- Caps – knitted variety 12% 5%
14 Non-polished Kota stones 18% 5%
15 Ethanol for Oil companies involved in marketing 18% 5%
16 Biofuel pellets 18% 5%
17 Marine engine 28% 5%
18 Flooring made of bamboo 18% 12%
19 Rubber Rollers – operated by hand 18% 12%
20 Pressure stoves made of brass – kerosene operated 18% 12%
21 Slide fasteners and zips 18% 12%
22 Machine-made Handicrafts 18% 12%
23 Handbags – purses, jewellery boxes, pouches 18% 12%
24 Fuel cell vehicle 28% 12%
25 Television sets measuring 68 cm or less 28% 18%
26 Resin cement, Putty (glaziers) 28% 18%
27 Freezers – ice cream, water coolers, refrigerators 28% 18%
28 All washing machines 28% 18%
29 Food mixers and grinders 28% 18%
30 Floor cleaners – vacuum machines 28% 18%
31 Varnishes, paints 28% 18%
32 Hair clippers and shavers 28% 18%
33 Hair cleaning devices 28% 18%
34 Water heaters (storage) 28% 18%
35 Heaters (immersion rods) 28% 18%
36 Hand and hair dryers 28% 18%
37 Smoothing irons – Electric variety 28% 18%
38 Fragrance – Sprays 28% 18%
39 Sprays (toilets) 28% 18%
40 Cosmetic-applying pads 28% 18%
41 Batteries – lithium-based 28% 18%
42 Powder puffs 28% 18%
43 Motor vehicles for special purposes 28% 18%
44 Self-propelled work trucks 28% 18%
45 Trailers including semi-trailers 28% 18%

Conclusion

The introduction of GST has brought about uniformity in taxation. Industry and trade, and the economy at large have seen huge benefits from this taxation system. Consequently, the knowledge of GST has become crucial for people to understand the pricing and taxation behind goods and services.

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