GST Structure in India
GST has tax slab rates of 5%, 12%, 18%, and 28%. 7% items are exempted from GST, whereas, 14% items have 5% GST tax slab and 17% items have 12% GST tax slab. Around 43% items have 18% GST slab rate and 19% items have 28% GST slab rates.
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How does GST registration work for you?
Any business offering sale of goods with annual turn over of 40 lacs or service with annual turn over of 20 lacs would require the registration for GST and have a valid GST Number.
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Find the structure of GST in India
GST was introduced with the aim of minimizing the tax burden and inflation rates. An amalgamation of various taxes, GST is a comprehensive, uniform, multi-stage, destination-based tax system that is applied to every value addition. Although the new tax regime has brought some tax relief, a fact that is undeniable is that the significant increase in compliance cost.
The GST tax structure comprises of Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Integrated Goods and Services Tax (IGST) and Union Territory Goods and Services Tax (UTGST). There are four slab tiers ranging from 5 percent to 28 percent wherein the lowest are for essential items and the highest for luxury goods.
Calculate the GST Amount Online using GST calculator.
Central taxes that are subsumed by GST are:
- Central excise duty
- Additional excise duties
- Excise duties levied under the Medicinal and Toilet Preparations
- Service tax
- Additional customs duty or Countervailing duty
- Special additional duty of customs
- Central surcharges and cesses in the nature of taxes on goods/services
State taxes absorbed under GST are:
- State VAT
- Luxury tax
- Entertainment tax that is levied by the local body
- Taxes on advertisement
- Taxes on lottery, betting and gambling
- State charge and cesses
- Central sales tax
- Goods and Services are divided into five slabs - 0%, 5%, 12%, 18% and 28%
Who should register for GST?
The following entities have to mandatorily do GST registration
- Business entities with an aggregate turnover per annum exceeding 40 lakhs
- Sellers of goods on the e-commerce platform
- When sellers sell goods to other states
- E-commerce aggregators
- Businesses that are liable to pay Reverse Charges
- Individuals supplying via e-commerce aggregators
GST tax rates on common items
| Tax slab | Products |
|---|---|
| NI | All live animals other than horses, meat, certain dairy products like fresh milk, pasteurised milk, curd, buttermilk, cream; eggs, natural honey, fresh vegetables and fruits, coconuts, cereals like rice, maize, barley, flour, sweets, etc. |
| 5% | Other household necessities such as frozen meat and vegetables, edible oil, butter, milk powder, skimmed milk, coffee, tea, groundnuts, soya beans, bread, drugs, etc. |
| 12% | This includes computers and processed food like cheese, refined sugar, spices, instant foods, packaged fruit juices, nuts, spices, etc. |
| 18% | Certain packaged foods like condensed milk, cornflakes, pastries; toiletries like hair oil, toothpaste and soaps; and capital goods and industrial intermediaries are covered here. |
| 28% | Aerated waters containing sugar; luxury items such as premium cars, and small cars, consumer electronics like AC and refrigerators, cigarettes, high-end motorcycles are included in this slab. |
Refer the complete list here
Types of Exemptions:
Under the GST Act, the exemption should be in public interest by way of issue of notification, on the recommendation from the Council or by way of special orders mentioning the reasons
Absolute exemption: The supply of the specific good is exempted, irrespective of who the supplier is or whether it is intra- or inter-state.
Ex: Transmission or distribution of electricity by an electricity transmission or distribution utility, Services by Reserve Bank of India, services by veterinary clinics
Conditional Exemption: The exemption is subject to certain terms and conditions under the GST Act. For example, the services by a hotel, inn or guest house with a tariff of a unit of accommodation less than Rs. 1000/- per day
Conditional or partial exemption: Intra-state supplies of goods or services offered by a registered person to an unregistered person are exempted from tax under the reverse charge mechanism. This is applicable only if the aggregate value of the goods or services received by a registered person from all or any of the suppliers does not exceed Rs. 5000/- in a day.
Know the five important laws of GST.
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