GST Rates in India 2024: List of Goods and Services Tax Rates, Slabs, & Revisions

Pramit Pratim Ghosh |Updated on: June 14, 2024

• Introduction
• GST Exemption List - Goods & Services
• GST Rates Slab
• GST Rates on Loans and Advances
• GST on car loan
• GST on real estate
• How-GST-impacts-our-economy?
• FAQs

The Goods and Services Tax (GST) has been a game-changer for the Indian economy since its introduction in July 2017. By unifying multiple central and state taxes into a single tax system, GST has streamlined tax structures and eliminated the cascading effect, reducing the overall tax burden on businesses and consumers.

GST has brought about a single, seamless national market, facilitating easier and more transparent transactions. Its comprehensive IT system has enhanced compliance, made tax collection more efficient, and reduced tax evasion. Furthermore, GST has fostered a business-friendly environment, attracting both domestic and foreign investments, and boosting economic growth.

A key aspect of GST is the categorization of goods and services into different tax rate slabs. These slabs are essential for determining consumer prices and government tax revenue. Understanding these rates is crucial for businesses to price their products correctly and for consumers to be aware of the taxes they pay.

Understanding GST Rates

GST rates in India are divided into multiple slabs, each serving a distinct purpose in the taxation system. The primary slabs are 5%, 12%, 18%, and 28%. These rates are determined based on the nature of goods and services and their necessity or luxury status. Essential items are taxed at lower rates to ensure affordability, while luxury goods and services are subjected to higher rates to generate revenue and discourage excessive consumption.

The categorization of goods and services into different slabs is essential for maintaining a balanced tax structure. It ensures that essential commodities remain affordable, while luxury items contribute more to the revenue pool.

GST Rate Slabs

Check out the table given below to get a concise overview of the GST rate slabs and examples of goods and services under each category.

Understanding these rates helps businesses comply with tax regulations and allows consumers to be aware of the taxes they are paying on goods and services. As GST continues to evolve, staying informed about the current rates and slabs is crucial for everyone involved in the Indian economy.

How to Calculate GST?

Understanding how GST (Goods and Services Tax) is calculated involves applying the appropriate tax rate to the taxable value of goods or services. This determines the additional amount customers pay on top of the base price.

Explore Our GST Calculator for Effortless Tax Calculations!

Impact of GST on Different Sectors

GST has revolutionized India's taxation system by replacing multiple indirect taxes with a unified tax structure, streamlining operations, and fostering a seamless national market. Here's a breakdown of its impact across various sectors:

Loans and Advances

Previously, service tax was levied on loans at 15%. With the advent of GST, this has increased to 18%. However, GST is not applicable to loan repayments or interest payments. It is only levied on processing charges and other fees excluding principal and interest payments. Therefore, the overall impact of GST on loans remains minimal, primarily affecting ancillary charges like processing fees and prepayment charges.

Car Loans

GST is applicable at a rate of 28% on personal use vehicles, without differentiation between petrol and diesel cars. Additionally, luxury cars attract a Composition Cess, increasing the effective tax rate. However, vehicles using cleaner technologies or electric vehicles benefit from lower tax rates, promoting sustainable mobility solutions.

Real Estate

GST applies to under-construction properties at varying rates. Until March 31, 2019, the rate was 12%, which was subsequently revised. From April 1, 2019, non-affordable housing properties are taxed at 5%, while affordable housing properties incur a tax rate of 1%. This has streamlined taxation in the real estate sector, impacting both residential and commercial properties. Furthermore, various construction materials attract GST rates ranging from 5% to 28%, affecting overall project costs.

Economic Impact

GST's implementation aimed to eliminate cascading taxes like CST, VAT, service tax, and others, which complicated the business landscape. By unifying these taxes, GST has facilitated easier movement of goods and services across state borders, promoting a conducive environment for business growth and enhancing overall economic efficiency.

Conclusion

While GST has led to adjustments in tax rates across sectors like loans, automobiles, and real estate, its overarching goal remains to simplify taxation, reduce tax cascading, and bolster economic growth. Understanding these impacts is crucial for businesses and consumers alike to navigate the evolving tax landscape effectively.

From simplifying tax structures to fostering a unified market, GST has reshaped the way transactions are conducted across the country. Are you ready to streamline and automate your GST processes for enhanced efficiency and compliance?

Consider TallyPrime, a robust software solution designed to seamlessly integrate GST calculations, invoicing, and compliance management. With TallyPrime, empower your business to navigate the complexities of GST effortlessly, allowing you to focus on what truly matters—growing your enterprise in the dynamic Indian market landscape. Embrace the future of taxation with TallyPrime and embark on a journey towards simplified business operations and accelerated growth.

Frequently Asked Questions (FAQs)

What are the different types of GST in India?

India implements four types of GST:

• 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 related provisions are determined by the GST Council, comprising 33 members including state Finance Ministers. Chaired by the Union Finance Minister, the GST Council meets to deliberate and decide on GST rates.

What are the GST rates in India?

GST rates in India are structured into four slabs: 5%, 12%, 18%, and 28%, applicable to various goods and services based on their categorization.

What is the GST exemption limit for 2020?

Currently, businesses and organizations with turnovers up to Rs 20,00,000 are exempted from GST registration. In hilly and northeastern states, this exemption limit is Rs 10,00,000.

Is GST cess credit available?

GST cess is imposed to compensate states for revenue loss due to GST implementation. This cess is not applicable to exporters and those under the compensation levy. Input tax credit for cess can only be utilized to offset compensation cess liabilities, not for other taxes like CGST, SGST, or IGST.

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