Updated GST Tax Slab Rates List in India for Goods and Services

GST Tax Rates List

July 1, 2017 will be a landmark day for India as the country will roll out the GST (Goods and Services Tax) scheme from the same date. The biggest reform which is expected to simplify the Indian tax structure was unveiled by our finance minister Arun Jaitley yesterday. GST scheme consists of a four slab structure under which the proposed goods and services will be taxed accordingly.  The four slabs are in the figure of 5%, 12%, 18% and 28%. The five services that will attract a taxation of 28% include five-star hotels, racing, movie tickets and betting on casinos and racing.  Education and healthcare will be exempted from the tax regime and will continue to remain unaffected. The majority of the services will be part of the tax slab of 18%. Buying television, air conditioners and refrigerators will be costly from July as the proposed GST on the same is 28% as compared to the current rate of 23%. The scheme is expected to have a mixed effect on the industry as the impact of the same will be visible in the upcoming few years. GST Council will now conduct a meeting on June 3 to decide the taxation slab for gold and other important metals along with packaged food, textiles and footwear.

What is GST ?

GST stands for Goods and Service tax, which is going to replace the previous structure of taxes levied by the state and central government. It is a consumption based indirect tax which is charged on sale, manufacturing and consumption on goods and services at the national level. Exports and direct tax like income tax, corporate tax and capital gain tax will not be affected by GST. Upon implementation the GST will take the duel tax system comprising of –

  • Central GST or CGST – To be charged by the central government.
  • State GST or SGST – To be charged by the state government.
  • Integrated GST or IGST – To be charged by central government on the inter-state supply of various goods and services.

2 Months Relaxation Time to File GST Returns

Well, as you all know that with just few days left for the implementation of Goods and Services Tax (GST), the GST Council in its 17th meet on Sunday came out with a big announcement of approving six set of rules, including GST Returns, e-way Bills and Tax Rate on Lotteries and Hotels. The council chaired by Finance Minister Arun Jaitley announced to give 2 months relaxation time for filing the Returns. The council also announced that the official rollout of GST will take place on the midnight of June 30-July 1. He also stated that the further required to come to a consensus related to e-way bills and during such period, an alternative rule will be in implementation.

GST Council not only decided to give a relaxed timetable but it also mentioned to give the exemption from penalties and late fees while filing the returns in the first two months. If experts are to be believed, the norms for filing the returns have been relaxed until September because this move will give ample time to businesses to prepare their IT systems and to comply with the new indirect tax regime. After the Council’s meeting on Sunday, the Confederation of All India Traders (CAIT) also said that it will give more time to traders to prepare themselves in order to comply with GST law.

Not only this, the Council also gave its approval to the anti-profiteering rules, wherein a five member anti-profiteering authority, headed by a retired secretary level officer will decide on levying penalty if the businesses do not pass on the price reduction benefit to the consumers under the GST regime. Finance Minister also said that State-run lotteries will be taxed at 12% and private lotteries will be taxed at 28% respectively. The Council is scheduled to meet again on 30th June,2017-on the eve of GST rollout.

Various GST Tax Slab in India

No Tax

  • Goods - No taxes will be levied on goods like milk, fruits, vegetables, bread, salt, bindi, curd, sindoor, natural honey, bangles, handloom, besan, flour, eggs, stamps, printed books, judicial papers, and newspapers.
  • Services - All hotels and lodges who carry a tariff below Rs. 1,000 are exempted from taxes under GST.

Tax Slab of 5%

  • Goods - The goods which will attract a taxation of 5% under GST include skimmed milk powder, fish fillet, frozen vegetables, coffee, coal, tea, spices, pizza bread, kerosene, medicines, agarbatti, insulin, cashew nuts, lifeboats etc,
  • Services - Small restaurants along with transport services like railways and airways will come under this category.

Tax Slab of 12%

  • Goods - Items coming are the tax slab of 12% include frozen meat products, butter, cheese, ghee, pickles, Ayurvedic medicines, sausage, fruit juices, bhujia namkeen, tooth powder, umbrella, instant food mix, cell phones, sewing machine etc.
  • Services - All Non-AC hotels, fertilizers, business class air tickets will attract a tax of 12% under GST.

Tax Slab of 18%

  • Goods - As mentioned above, most of the items are part of this tax slab. Some of the items are flavored refined sugar, cornflakes, pasta, pastries and cakes, preserved vegetables, ice cream, sauces, soups and mineral water.
  • Services - All those AC hotels which serve liquor, IT and Telecom services and financial services along with branded garments will be part of this tax slab.

Tax Slab of 28%

  • Goods - Over 200 goods will be taxes at a rate of 28%. The goods which will be part of this category under GST are deodorants, chewing gum, hair shampoo, sunscreen, pan masala, dishwasher, weighing machine, vacuum cleaner. Other items include shavers, automobiles, hair clippers, motorcycles.
  • Services - As mentioned above, five-star hotels, racing, movie tickets and betting on casinos and racing will come under this category.

What’s in store for automobile buyers?

Car buyers who are interested in buying passenger vehicles are bound to get benefits from the GST scheme. The effective duty on such models is expected to be reduced which will ultimately bring the price down. The prices of smaller cars are not expected to show a major change. The good news is that luxury cars are all set to get cheaper. Currently, a taxation of more than 50% is levied on them. Once GST scheme is rolled on, the tax levied will be between 42-45%. Buying a hybrid car will turn out to be an expensive affair after July 1 as the taxation will be levied at the highest rate of 28%. In addition to this, a cess of 15% will also be charged.

TVs, ACs and Refrigerators to cost you more

Consumer durables and appliances are going to cost you more after July 1, 2017. Those who are looking forward to buying a new television set or a brand new refrigerator and washing machine must do the same before GST rates are implemented. Consumer durables and all home appliances will now see a price rise of 4% and more as they will be coming under the tax slab of 28%.

Comparison of the Current Tax Rates with the Proposed GST Tax Rates

IndustryCurrent tax rateGST rate
Toothpaste25-26%18%
Paint25-26%28%
Cigarette28%+ excise duty28%+cess
Four wheelers31-49%29-43%
Two Wheelers30-31%Motorcycles- 31
Others- 28%
Cement22-24%28%
Soaps25-26%18%
Airlines (Economy class)6%5%
Telecom and Insurance15%18%
Airlines ( Business class)9%12%

GST Tax Rates List for Different Goods

Type of Product5%12%18%28%
Dairy ProductSkimmed milk powder
milk food for babies
Cream & yogurt

Natural honey which is put up in an unit container and bears a registered brand name
Butter and other fats
Cheese
Condensed Milk
Edible vegetablesFrozen vegetables and vegetables which are provisionally preserved
Edible fruits and nutsDry fruits
Beverages/hot drinksCoffee and Tea
Products of milling industry
Starches and Insulin and Malt
Cereal groats, meal and pellets which are put up in an unit container and bear a registered brand name.

Insulin
Starches Malt
Oil seeds and oleaginous fruitsSoya beans, ground nuts
Gums & resins Natural gums, resins, gum resins
Sugar and sugar confectioneryBeet sugar, cane sugarRefined sugarMolasses Chewing gum / bubble gum and white chocolate
Cocoa and cocoa preparationsCocoa beans whole or broken, raw or roasted Cocoa butter, fat and oil
Preparations of cereals, flour, starch or milk Pizza bread, Seviyan (vermicelli) Corn flakes, Pasta, spaghetti, macaroni Waffles and wafers coated with chocolate
Pharmaceutical productsDiagnostic kits for detection of all types of hepatitisWadding, gauze, bandages and similar articlesNicotine polacrilex gum
Essential oil, perfumes, soaps and cosmeticAgarbattiTooth powderHair oil, toothpaste and soaps Perfumes and toilet waters.
Plastics and articles thereofFeeding bottlesSelf-adhesive plates, sheets, film, foil, etc. of plastics Floor coverings of plastics, Baths, shower baths, sinks, wash basins,

GST Tax Rates List for Different Services

Tax SlabServices
5%Transport services like railways and airways
Transport of passengers by air in economy class
Supply of tour operators’ services
Selling of space for advertisement in print media
Small restaurants with turnover of Rs. 50 Lakhs
Transport of passengers by motor cabs and radio taxis
12%Business class air tickets
Hotels, inns, guest houses, which have a room tariff of Rs.1000 and above but less than Rs.2500 per room per night
18%AC hotels which serve liquor to customers
Hotels, inns, guest houses, which have a room tariff of Rs.2500 and above but less than Rs.5000 per room per night
IT services
Telecom services
28%Race club betting & gambling
Five-star Hotels
Entertainment & Cinema
Hotels, inns, guest houses, which have a room tariff of Rs.5000 and above per room per night

Revised GST Tax Rates List

The GST Council on June 11, 2017 has decided to lower the proposed rates of 66 goods and services. The GST tax rate for goods like pickles, instant food mixes, insulin, agarbatti has been revised in the meeting. The Council also decided to allow all the small traders, restaurants and manufacturers with a turnover of Rs. 75 Lakhs to opt for a composition scheme. This move comes as a big respite to the small business owners who will be able to opt for a composition scheme and hence pay taxes at 1-5 percent. The government expects to strengthen the small and medium enterprise through this step. Earlier the limit for the same was set at Rs. 50 Lakhs. Under this scheme, the small business owners have the provision to pay 1-5% GST rate on the annual sales they make without any tax credits.

There’s a good news for cinema lovers as the movie tickets priced Rs. 100 and below will be taxed at 18%. In case, the cost of the movie ticket is above 100, then it will be taxed at 28%.

ProductProposed GST Tax Rate on May 19Revised GST Tax Rate on June 11
Pickles, Toppings18%12%
Cashew Nuts12%5%
Instant Food Mix18%12%
Insulin 12%5%
Agarbatti12%5%
Children's Colouring Book18%NIL (0%)
Tractor Parts28%18%
Cutlery 18%12%
School Bags28%18%
Kajal 28%18%
Computer Printer28%18%
Plastic Beads28%18%