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

GST Tax Slabs Rates List 47986 views

Finally, the landmark event in India’s taxation history arrived on July 1 2017 when GST (Goods and Services Tax) became the reality. The biggest reform, which is expected to simplify the Indian tax structure, was launched by the Prime Minister Narendra Modi in the Central Hall of Parliament in the wee hours of 1st July. Jammu & Kashmir, previously, was not the part of the GST regime. But with the state assembly passing the bill despite a boycott from the opposition, the GST in J&K has become a reality now. The GST scheme consists of a four slab structure under which the proposed goods and services will be taxed accordingly. The four slabs are 5%, 12%, 18% and 28%. The five services, which feature a taxation of 28% under GST, include five-star hotels, racing, movie tickets and betting on casinos and racing.  Education and healthcare are exempted from the tax regime and will continue to remain unaffected. The majority of the services form the part of the 18% tax slab. 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.

What is GST ?

GST stands for Goods and Service tax, which by virtue of its launch, has replaced the previous structure of multiple 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 taxes like income tax, corporate tax and capital gain tax will not be affected by GST. The much-awaited GST has a dual 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.

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 ₹ 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, fertilizers, 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, , 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, tractors, 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.

4 GST Tax Slab Rates List for Different Goods

5% GST Tax Slab Items12% GST Tax Slab Items18% GST Tax Slab Items28% GST Tax Slab Items
  • Sugar

  • Tea

  • Skimmed milk

  • Milk food for babies

  • Edible oils

  • Roasted coffee beans

  • Packed paneer

  • Frozen vegetables

  • Cashew nuts

  • Spices

  • Pizza bread

  • Rusk

  • Sabudana

  • Fish fillet

  • Packaged food items

  • Fertilizers

  • Footwear upto ₹500

  • Apparels upto₹1,000

  • Agarbatti

  • Domestic LPG

  • Floor covering

  • Coir mats

  • Matting

  • Insulin

  • Medicines

  • Stent

  • Braille watches

  • Braille typewriters

  • Braille paper

  • Hearing aids

  • Postage stamps

  • Revenue stamps

  • First day covers

  • Stamp-post marks
  • Ghee

  • Butter

  • Fruit juice

  • Almonds

  • Packed coconut water

  • Preparations of vegetables

  • Fruits

  • Nuts

  • Pickle

  • Murabba

  • Chutney

  • Jjam

  • Jelly

  • Namkeen

  • Bhujia,

  • Frozen meat products,

  • Packaged dry fruits

  • Animal fat sausage,

  • Non-AC restaurants

  • State-run lotteries

  • Exercise books

  • Notebooks

  • Work contracts,

  • Apparel above ₹1000

  • Tooth powder

  • Spoons

  • Umbrella

  • Cake servers

  • Sewing machine

  • Ladles

  • Forks

  • Tongs

  • Skimmers

  • Fish knives

  • Mobile

  • Diagnostic kits & reagents

  • Ayurvedic medicines

  • Glasses for corrective spectacles and flint buttons

  • Playing cards

  • Ludo

  • Carom board

  • Chess board
  • Biscuits

  • Flavoured refined sugar

  • Cakes,

  • Pastries

  • Preserved vegetables

  • Soups

  • Ice cream

  • Pasta

  • Instant food mixes

  • Corn flakes

  • Curry paste

  • Mayonnaise

  • Salad dressings

  • Mixed condiments

  • Mixed seasonings

  • Branded garments

  • Footwear priced above ₹500

  • Headgear

  • Soap

  • Hair oil

  • toothpaste

  • tampons

  • toiletries

  • kajal pencil sticks

  • tissues

  • computers

  • printed

  • circuits

  • printers

  • monitors

  • camera

  • speakers

  • CCTV

  • Electrical transformer

  • Optical fiber

  • Bidi Patta

  • Mineral water

  • Tissues

  • Envelopes

  • Steel products

  • Weighing machinery (non-electrical or electronic)

  • Aluminium foil Furniture

  • Bamboo

  • Padding pools Swimming pools
  • Chewing gum Molasses

  • Chocolates devoid of cocoa

  • Waffles and wafers coated with chocolate

  • Deodorants

  • Shaving creams

  • After shave

  • Shavers

  • Hair shampoo Sunscreen

  • Dye

  • Hair clippers

  • Ceramic tiles

  • Paint

  • Wallpaper

  • Washing machine

  • Water heater

  • Vacuum cleaner

  • Dishwasher

  • Automobiles Motorcycles

  • Aircraft for personal use

  • Pan masala

  • Bidis

  • Weighing machine ATM

  • Vending machines

  • Aerated water

4 GST Tax Slab 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

Impact of GST

Since India has different GST tax rates compared to a single GST rate in most prosperous nations across the globe, the national economy would undergo a major shift from the times of multiple taxes. From a common man to the riches, the word GST will have a significant bearing. While some goods and services would become cheaper, others may just take out more from the pocket of the consumers. The game changer, however, could be the input tax credit that the manufacturers can avail, which hopefully should benefit the consumers at large. The manufacturers can claim tax credit for the raw materials they procure, as well as for using the services like advertising, marketing and training. Similarly, the service providers can avail the credit for the goods they procure.

Which Indirect Taxes Would GST Not Subsume?

Yes, the GST is expected to subsume a bundle of indirect taxes. However, a few of them would be out of GST ambit. These include-

  • Export Duty
  • Basic Customs Duty
  • Toll Tax
  • Stamp Duty
  • Property Tax
  • Road & Passenger Tax
  • Electricity Duty

Loans to Cost a Little More

Those applying for personal loan, home loan and other types of credit facility would have to shell out 3% more tax on the processing fee and other charges payable on the loan in the advent of 18% GST rate implementation. Previously, a 15% service tax was chargeable on the same.

Effect on Personal Loan

In the case of a personal loan, the processing fee can be  anywhere 1%-2% of the loan amount. The fee so arrived will be under the purview of 18% GST. So, if the processing fee comes out to be₹20,000, the GST of ₹3,600 would be applicable. The same rate will be applicable on prepayment which incurs a fee of 2%-5% of the outstanding balance on a given date.

Apply-For-Personal-Loan-after-GST

Effect on Home Loan

The processing fee of a home loan is somewhere between 0.25%-1% of the loan amount sanctioned. On the fee amount, a GST tax rate of 18% would be applicable. Prepayment, however, can be free of cost if taken on a floating basis. On a fixed rate loan, a fee of 2%-3% of the outstanding loan plus 18% GST would be charged.

Apply-for-Home-Loans-post-GST

Effect on Car Loan

To get the dream car home on a loan, a processing fee at 1%-2% of the loan amount would be debited at the time of application. In addition, tax of 18% on the fee amount would be charged from a borrower. Prepayment, on the other hand, bears a penalty of 2%-5% of the outstanding amount. Beyond which, the same tax rate of 18% will apply.

Apply-for-Car-Loan-after-GST

Big Breakthrough for Small Traders & Manufacturers Under GST Composition Scheme

The Council also decided to allow all the small traders, restaurants and manufacturers with a turnover of ₹75 Lakhs to opt for a composition scheme. This move comes as a big respite to the small business owners who will now 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 enterprises through this step. Earlier the limit for the same was set at ₹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.

GST Impact on Companies- Reprint Revised MRP or Face Jail Term, Warns Govt

In what could safeguard the interests of consumers at large, the Union Consumer Affairs Minister Ram Vilas Paswan has taken a hard stance on the companies saying they must reprint the revised MRP post GST tax rates. Failing to do so will attract penalty and even the jail term. Let’s see how these punishments stack up.

  • First-time offence would attract a penalty of₹25,000
  • Second-time violation of the norm would lead to a penalty of  ₹50,000
  • Third-time violation would put before a penalty of ₹1 lakh or even the jail term

This was all about the tax rates that are now applicable on various goods and services as per GST and the compliance to be followed by the companies. But what about filing the GST returns? It is equally important to know that as well. So, stay glued folks, as a comprehensive list of information pertaining to filing GST returns are coming your way.

2 Months Relaxation Time to File GST Returns

GST Council in its 17th meet held in the month of June 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. 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, 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.

Guidelines to File GST Returns

As it is not clear regarding the rates to be charged on various goods and services,  people, especially businesspersons and small traders are confused as well as scared of the complex procedure of filing the GST Returns. When it comes to GST Returns, a lot of misconceptions regarding the same have created a bad impression of the complexity around it. But, you will be glad to know that filing the GST Returns is an easy procedure. Wanna know how? All you need to do is just read the post further as we have listed below the basics for you.

Those Who Need Not to Bother

If we go by statistics, approximately 80% of the businesses will either don’t need to file the return or file just once in 3 months. Yes, that’s right!

  • Those who are having a turnover below ₹20 Lakh need not to file any return. They don’t need to worry with the GST rollout.
  • Those with a turnover of more than ₹ 20 Lakh but below ₹75 Lakh, should read this. Why? As they need to file one return in three months, which means four returns in a year.
  • Not only this, the individuals don’t need to give any details of the invoices. However, if someone has opted for a composition scheme, they need to deposit a lump sum amount in the tax without giving much details to the government. All they need to do is just disclose the total turnover.

Form GSTR-1: Those who are having a turnover of more than ₹75 Lakh and are B- to- C enterprise (business to consumer, including most of the retail sector) will need to file one return GSTR-1, disclosing total sales turnover and nothing else.

Form GSTR-2: It is actually not a return, rather a computer generated account of all the invoices as furnished by the suppliers. Here, people don’t need to file any return but make sure that all their business reflects in GSTR-2, which is not a return but the details of the purchases due to which individuals will get their input tax credit. However, GSTR-2 is not supposed to be filed by an individual as it automatically gets generated when the suppliers file their own GSTR-1.Well, you just need to approve the same.

Form GSTR-3: It is also not a return but a combination of GSTR-1 and GSTR-2 and is computer generated. Basically, it gives the summary of the total output tax liability and input tax credit. Moreover, the difference between the two is the final tax liability of the month. It is for your review purpose and if you find all the details being reflected correctly, all you need to do is just approve the same. Thus, you just need to file one return, and the government will send you two computer-generated returns with additional information so that you can check and approve the same.

However, talking about the invoices to be filed under GST, only suppliers to resellers (B2B suppliers) not under the composition scheme have to file invoice-wide details. When it comes to composition scheme (paying tax at a flat rate without input credits), it is available for service providers and manufacturers, enjoying an annual turnover of upto Rs.75 Lakh . For the seamless transition into the new indirect tax regime, the GST Return filing process has been simplified with Form GSTR-3B, containing only summary details. Well, for the acclimatization of the taxpayers with the new tax regime, the same form has been provided to all classes of taxpayers.

GST Return Filing Details

Return for the Month of
Form GSTR-1Form GSTR-2
Form GSTR-3
July 2017
5th September instead of 10th August
10th September instead of 15th August
20th August
August 201720th September instead of 10th September
25th September instead of 15th September
20th September