GST Rates in India – Different Services under GST Slabs

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Pramit Pratim Ghosh | Nov-21-2019

Introduction

Ever since GST or Goods and Services Tax regime was announced, there has been a wide speculation about the GST rates bracket. The GST Council is the body that decides the rate slabs and the GST Council has been periodically revising the list of goods and services for each rate slab.

It’s clear that the Government’s intentions are to have lower tax rate for goods and services which are essential needs and higher tax rates for goods and services that are considered as luxury supplies.

Here’s a curated a list of GST rates structure for various goods and services, classified across the different GST tax slabs –

GST Exemption List - Goods & Services

Goods

Services

Poultry Products – Fresh Meat, Fish, Chicken, Eggs

Hotel Services priced at less than INR 1000

Dairy Products – Milk, Curd, Butter Milk, Jaggery (Gur), Lassi, unpacked Paneer

Education (exemption continued from before)

Fresh Fruits & Vegetables

Healthcare (exemption continued from before)

Food Items – Natural Honey, Flour (Atta & Maida), Pulses, Basmati Rice, Gram Flour (Besan), Bread, Vegetable Oil, Religious Sweets (Prasad), Common Salt

 

Cosmetics & Accessories – Bindi, Vermillion (Sindoor), Bangles

 

Stationery – Stamps, Judicial Papers, Printed Books, Newspapers

 

Handloom Products

 

Textile – Jute, Silk

 

Contraceptives

 

Essential Goods & Services at 5% GST slab

Goods

Services

Dairy Products – Skimmed Milk Powder, Milk food for babies, Condensed milk, Packaged Paneer, Cream

Railway Travel

Frozen Vegetables

Economy Class Air Travel

Food Items – Sugar, Spices, Edible Oil, Pizza Bread, Rusk, Sweets, Fish Fillets, Tapioca (sabu daana)

Cab Aggregators (e.g. Uber & Ola)

Beverages – Coffee, Tea, Juices

 

Apparel – below 1000 INR

 

Footwear – below 500 INR

 

Fuel – Kerosene, LPG, Coal

 

Solar Panels

 

Common Utilities - Broom

 

Medical Goods - Medicines, Stents

 

Newsprint

 

Lifeboats

 

Textile – Cotton, Natural Fibre and yarns

 

Incense Sticks (Agarbatti)

 

Standard Goods & Services at 12% GST slab

Goods

Services

Dairy Products – Butter, Cheese, Ghee

Non-AC Hotels & Restaurants

Packaged Dry Fruits

Business Class Air Travel

Food Items – Snacks (Namkeen & Bhujia), Packaged Chicken, Sausages, Jams, Sauces

 

Beverages – Fruit Juices, Packed Coconut Water

 

Apparel – above 1000 INR

 

Personal Hygiene – Tooth Powder

 

Stationery – Exercise Books, Notebooks

 

Common Utilities – Sewing Machine, Umbrella

 

Ayurvedic Medicine

 

Mobile Phones

 

Standard Goods & Services at 18% GST slab

Goods

Services

Dairy Products – Ice Cream

Accommodation at hotels with tariff of more than 2500 INR but less than 7500 INR

Preserved Vegetables

Supply of food / drinks in AC / 5 star and above rated restaurants

Food Items – Flavoured refined sugar, Pasta, Corn Flakes, Pastries, Cakes, Soups, Instant Food Mixes, Processed Foods

Telecom Services

Beverages – Mineral Water

IT Services

Branded Garments

Financial Services

Footwear – above 500 INR

Works Contract

Personal Hygiene – Tissues, Toilet Paper, Hair Oil, Soap Bars, Toothpaste

Cinema Tickets worth 100 INR or les

Stationery – Envelopes, Fountain Pens

 

Electronic Equipment – Printed Circuits, Monitors

 

Iron & Steel Products

 

Biri wrapper leaves (Tendu Patta)

 

Biscuits

 

Textile – Man-made fibre and yarn

 

Special / Luxury Goods & Services at 28% GST slab

Goods

Services

Food Items – Chocolates, Chewing Gum, Custard Powder

Accommodation at hotels with tariff of more than 7500 INR

Beverages – Aerated Water

Race course betting

Personal Hygiene – Deodorants, Shaving Cream, After Shave, Hair Shampoo, Dye, Sunscreen, Perfume, Face Creams, Detergents

Cinema Tickets worth more than 100 INR

White Goods – Vacuum Cleaner, Shavers, Hair Clippers, Washing Machines, Dish Washers, Water Heaters & other Home Appliances

 

Speakers

 

Cameras

 

Automobiles & Motor Vehicles*

 

Housing Materials – Paint, Wallpaper, Ceramic Tiles, Cement

 

Weighing Machines, Vending Machines, ATM

 

Fireworks

 

Luxury / Demerit Goods* - Pan Masala, Tobacco, Bidis, Aerated Drinks & Motor Vehicles

 

*Note – Luxury / Demerit Goods as listed above will also attract a compensation cess over and above the GST rate of 28%

Articles outside the GST Tax Rate Slabs

      • Gold, gems, jewellery – 3%
      • Rough Precious & Semi – Precious Stones – 0.25%

Treatment of Luxury / Demerit Goods

In addition to the rates which have been fixed for major categories of goods and services, the GST council has approved the compensation rates for 5 luxury / demerit items. The proceeds of this cess will go into the compensation fund which would be used to bridge any tax revenue gap for states in the first five years of GST. The items that will be levied with the compensation cess, over and above the GST tax rates which are applicable on them are as follows:

Items

GST Rate Applicable

Approved Cess Range

Cess Ceiling

Coal

5%

INR 400 / tonne

INR 400 / tonne

Pan Masala

28%

60%

135%

Tobacco

28%

61% - 204%

INR 4170 / thousand

Aerated Drinks

28%

12%

15%

Motor Vehicles

28%

1% – 15%

15%

GST Rates on loans and advances

Earlier Service Tax was levied on Loans which has now been replaced by GST which would now be levied on loans. The rate of Service Tax was 15% whereas the rate of GST is 18%. A lot of people are of the opinion that the effective cost of having a loan would increase as the rate of GST is 3% higher than the rate of Service Tax. Several people are of the opinion that their EMI’s would increase as the rate has been increased by 3%. However, this is not the case as GST is not levied on repayment of loan or on payment of Interest on Loan.

GST is only levied on the processing charges and any other charges paid to the bank excluding the principal repayment and interest payment. These other charges include the Loan Processing Fees, Loan Prepayment Charges and other charges, if any. As a major chunk of the loan repayment comprises of principal repayment and interest payment, the impact of GST on Loans would be very negligible. 

GST on car loan

The GST will be applicable on all personal use vehicles at the rate of 28%. There is no differentiation between the petrol and diesel powered vehicle. Apart from this, a Composition Cess is also levied on luxury cars.  The rates may increase from 29% to 50%. However the vehicles that operate on cleaner technologies and the electric vehicles attracts lower rate of taxes.

GST on real estate

GST on Real estate is applicable only for a property that is under development. The GST rate applicable is 12% till 31st March 2019.  But from 1st April, the GST rates on residential real estate has been altered to 5% for non-affordable housing properties while for affordable housing properties the tax rate levied is 1%. This is for both commercial and residential properties. In addition to this, various building materials used for the construction of houses/flats fall under GST are taxable from 5% (sand, marble rubble, etc.) to 28% (cement, etc.).

How GST impacts our economy?

GST was introduced to put an end to multiple taxes like CST, VAT, service tax, sales tax, central sales tax which are levied on different products, starting from the source of manufacturing till it reaches to the end consumer which makes the movement of goods and doing business very hard.

Here are the advantages and disadvantages of GST

FAQs

  • What are the various types of GST?

The 4 types of GST in India are:

    • SGST (State Goods and Services Tax)
    • CGST (Central Goods and Services Tax)
    • IGST (Integrated Goods and Services Tax)
    • UGST (Union Territory Goods and Services Tax)
  • Who decides GST Rates in India?

GST rates and other provisions related to it are decided by the GST Council, which is comprised of 33 members, including Finance Ministers of the state. The Council meeting is headed by the Union Finance Minister.

  • What is the GST rate in India?

The GST rate in India for various goods and services is divided under 4 slabs; these are 5% GST, 12% GST, 18% GST, and 28% GST.

  • What is the GST exemption for 2020?

Presently, businesses and organizations with a turnover of up to Rs 20,00,000 are exempted from the GST registration. The GST exemption limit for the limit for hilly and norther estates is Rs 10,00,000.

  • Is GST cess credit available?

The cess will compensate the states for any revenue loss on account of implementation of GST. This cess will not be payable by exporters and those persons who have opted for compensation levy. The input tax credit of this cess can be only used to pay compensation cess and not the other taxes like CGST, SGCT or IGST.


Read More on GST Rates & Charges

GST Rate Finder, GST Rate on Labour Charges, HSN Codes, SAC Codes, GST State Codes

 GST

GST Software, GST Calculator, GST on Freight, GST on Ecommerce, GST Impact on TCS, GST Impact on TDS, GST Exempted Goods & Services, Reverse Charge Mechanism in GST, GST Declaration

Types of GST

CGST, SGST, IGST, UTGST, Difference between CGST, SGST & IGST

GST Returns

GST Returns, Types of GST Returns, New GST Returns & Forms, Sahaj GST Returns, Sugam GST Returns, GSTR 1, GSTR 2, GSTR 3B, GSTR 4, GSTR 5, GSTR 5A, GSTR 6, GSTR 7, GSTR 8, GSTR 9, GSTR 10, GSTR 11

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