Different rates of GST in India
The imposition of GST in India has made it easier for people to pay taxes as it has reduced the price of a lot of commodities and services due to the elimination of the multiple tax system. In the following article you will get a brief on the meaning of GST, its types, the different rates of GST in India for the various product and services, the different rates of GST in India as per the 47th Council Meeting, and its impact on the various sectors.
Defining GST and its types
Indirect taxes in India like excise duty, service tax, entertainment tax, luxury tax, VAT, etc. have been clubbed under one tax called the Goods and Service Tax(GST). Under GST, the taxes applicable on the country’s products and services have been included under one specific tax. However, alcohol and petroleum goods are not included in GST. GST rate is defined as the percentage of tariff rate applied on the sale of goods and services of a country.
In India, there are four types of GST applicable to goods and services. They are SGST, CGST, IGST, and UGST.
SGST (State Goods and Service Tax) – SGST is the element of GST that is imposed by the State Government. It is applicable to the intra-state trade of products and services. The revenue generated from SGST goes to the state government.
CGST(Central goods and Service Tax)- CGST is the element of GST that is imposed by the Central Government on intra-state transactions of products and services. The revenue generated from CGST is shared between the center and the state. It is administered by the CGST Act.
IGST(Integrated Goods and Service Tax)– IGST is collected by the central government on the inter-state trade of products and services. It is regulated by the IGST Act.
UGST(Union Territory Goods and Service Tax)- UGST is the GST applicable on the trade of products and services in the Union Territories and is collected by the Union Territory Government.
Different rates of GST in India imposed on products
GST in India has been structured in such a way that necessity goods have lower tax rates than luxury goods which have higher tax rates. The different rates of GST in India for all products and services have been put under different slabs:5%,12%,18%, and 28% GST respectively. Apart from that, gold and rough precious stones have different rates of GST in India which are 3% GST and 0.25% GST respectively.
The content of the following table would give a thorough understanding of the GST rates applicable to different products and services in India.
|5%||Goods that come under 5% GST are- Edible oil Spices Tea Coffee Cashews Sweets Fertilizers, pesticides Coal Incense sticks Walking sticks Bio-gas Mats Hearing-aid for disabled Lifesaving medicines like insulin Lifeboats etc||Services that come under 5% GST are- Transportation and tour services Print and advertising media Small restaurants Hotel takeaways etc|
|12%||Goods that come under 12% GST are- · Fruit juice · Dairy items · Frozen meat and processed food · Ketchup · Butter · Ghee · Notebooks and exercise books · Jewellery boxes · Beads made from plastic · Forks/spoon/knives · Diagnostic kits · Sewing machine, etc||Services that come under 12% GST are- · Real estate construction with a profit motive or for sale · Hotel accommodation between 1000-7500 rupees · Movie tickets costing 100 or below 100 · Guesthouses · Flight tickets that do not include economic tickets.|
|18%||Goods that come under 18% GST are- · Skincare · Hair oil · Shampoo · Commercial electronics · Tv set-top boxes · Length measuring devices · Power banks · Baby carriages, etc||Services that come under 18% GST are- · Construction work supply · Arrangement for events · Catering service outdoors · Amusement parks · Theatres, etc|
|28%||Goods that come under 28% GST are- · Caffeinated beverages · Aerated beverages · Carbonated beverages · Tobacco products and pan masalas · types of cement · Paint · Tyres · Luxury items including refrigerators, air conditioners · Vehicles, etc,||Services that come under 28% GST are- · Gambling · Five-star hotels · Casinos · Entertainment services · Club service · Go-karting, etc|
Apart from the GST tax rates mentioned on the goods above, some goods and services have a 0% tax rate. Products and services that are non-taxable under the GST scheme include
- Raw vegetables as well as raw fruits
- Salt of all kinds
- Judicial and stamp paper
- Types of rakhis with no metals
- Saving accounts of banks
- Hotels stay below Rs.1000, etc
Revised rates of GST revised as per latest GST Council Meeting
In order to ensure efficient pricing of different goods and services and provide transparency in the economy, the GST Council of India periodically revises the GST rates. The 47th GST Council Meeting was held on the 28 and 29th of June,2022. In accordance with the 47th GST Council Meeting, the different rates of GST in India have been revised for various goods and services as follows:
|Product||Existing GST rates||New GST rates|
|Printed and writing materials||12%||18%|
|Renewable energy system and Finished leather items||5%||12%|
|Electrical lamps and other items||12%||18%|
|Cheque book and financial services||Nil||18%|
|Orthopedic and ostomy appliances||12%||5%|
|Container and packages made from paper||12%||18%|
|Scrape, plastic waste||5%||18%|
Affect of the latest GST meeting
The following are the effects of the revised GST rates of the 47th GST Council Meeting
- The automobile Sector is to provide a GST rate of 5% on electrical vehicles.
- Health Sector is to charge 5% GST on hospital rooms whose per day charge is more than Rs.5000. This however does not include ICU rooms.
- In the Food Processing sectors, GST is to be applied on packaged curd, milk, and a few other items which were earlier exempted under GST. GST is to be made applicable to all kinds of mango which do not include sliced and dried mangoes.
- Ice cream is recommended to be made taxable at the rate of 5% in the Hospitality sector. The GST on hotel stays up to rupees 1000 should be charged 12%.
- In the Media and Entertainment Industry, a GST charge of 5% is applicable on the space selling systems and sale of time for advertisement purposes.
- Agricultural sector- GST applicable on machines used in the agricultural sector for grading and sorting is to be increased from 12% to 18%
- Transportation Sector-GST on the transportation of products through ropeways is to be lowered from 18% to 12%.
- The GST tax slab for the textile industry has been raised from 5%to 12%.
- GST is also made applicable on footwear costing 500 or below that and clothing costing less than or equal to 1000.
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Introduction of GST has brought a lot of advantages to the economy as it helps the taxpayers pay one uniform tax instead of a bunch of taxes. GST has made it easier for government to monitor the tax system since it came into effect.
The above articles provide a brief overview of the different rates of GST in India. Feel free to contact ODINT Consultancy with any questions you may have. We are here to solve your queries and assist you whenever you need us.