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With the Goods and Services Tax (GST), the Indian government introduced one of the biggest post-independence taxation reforms. GST is primarily devised to maintain a uniform indirect tax structure across the country. It aims to eliminate the cascading effect of central and state taxes that were levied previously. India’s immigration to this tax regime has helped the concerned officials turn 17 different kinds of indirect taxes into a single form of tax. This uniformity in the taxation scheme across India is undoubtedly a great development. 

 

In India, goods and services are categorised under GST slab rates for taxation. The GST rates are levied for each section depending on whether the good or service is a need or a luxury. Items of need are taxed at a lower rate while items of luxury are taxed in the higher bracket. However, there are some goods that are excluded from GST, with one of the most recent products being sanitary napkins.

What are GST Slab Rates

The GST regime covers about 1,300 types of goods and 500 types of services. It is, thus, classified into mainly four, notable GST slab rates, i.e. 5%, 12%, 18%, and 28%. To ensure the effectiveness of this scheme, a GST Council was set up to revise the rates whenever deemed necessary to keep up with evolving times. Thus, there is a periodic change in the GST rates on various products.

The following table lists down the categories that fall under each GST slab rate.

Levied GST Rate

Type of Product

0.25%

Cut and semi-polished stones

3%

Gold

5%

Household essentials, coal, Indian sweets, life-saving drugs

12%

Processed foods, computers

18%

Capital goods, industrial intermediaries

28%

Luxury items, sin goods

List of Items Under 5% GST Slab Rate

Products (Goods)

Services

Agarbatti, Biogas, Insulin

Leasing of aircrafts

Snow and ice, Walking sticks, Natural cork

Renting a motor cab (without fuel)

Indian sweets (mithai)

Tour operator services

Edible oil and spices, Coffee and sugar, Life-saving drugs, Cashew nuts/cashew nuts in shell

Scheduled transport by air or travelling via chartered or non-scheduled flights (used for pilgrimage purposes only)

Stamps/stamp postmarks

Goods transported in a vessel from outside the country

Appliances/equipment that aid the disabled

Print media ad space

Coir mats and floor coverings, Fertilisers, etc.

Transport services in AC vehicles and radio taxis, etc.

List of Items Under 12% GST Slab Rate

Products

Services

Frozen meat

Hotel accommodation (Between ₹1,001 and ₹7,500 per day)

Sauces/Ketchup/Mustard sauce

Real estate construction for the purpose of sale

Dairy items (apart from milk)

Food and beverages (at restaurants without AC and liquor licence)

Fruit juices

Intellectual Property rights on a temporary basis

Sewing machines

Goods transported in a vessel from outside the country

Handmade matches

Rental accommodation (Above ₹1,000 and below ₹2,500 per day)

Jewellery box

Air travel tickets (excluding economy)

Diagnostic kits

Chit fund services by foremen

Notebooks and exercise books, Plastic beads, Corrective glasses, etc.

Railway coaches, wagons, and rolling stock (sans refund of ITC)

List of Items Under 18% GST Slab Rate

Products

Services

Dental wax, Aluminium foil, Toothpaste, Plastic tarpaulin, Baby carriages

Food and drink at restaurants (with AC/heating and liquor licence)

Industrial electronics and transformers

Supply of food and party arrangements

Power banks (Lithium-ion batteries)

Government Job Contracts

Pencil kajal sticks, Headgears, Television set-top boxes, Televisions (up to 32-inch)

Entertainment (circus, folk theatre, cinema, drama)

Furniture (made from bamboo)

Outdoor catering

Stationary (staplers and pencil sharpeners, etc.)

Movie tickets (Above ₹100)

Hair oil, Shampoos, Weight-measuring devices (excluding electronic), Computer monitors (below 17-inch), etc.

Hotel accommodation (over ₹7,501 per day), etc.

List of Items Under 28% GST Slab Rate

Products

Services

Air conditioners

Ballet

Cement

Go-karting

Washing machines

Racecourse

Lotteries (state-owned/authorised)

Gambling

Paint

Casinos

Aerated beverages, Caffeinated beverages

Sports events (IPL, ISL, etc.)

Yachts, Aircrafts, Tobacco products, etc.

Food and drinks (5-star hotels), etc.

List of Goods Exempted Under GST

Milk

Kajal

Natural honey

Sanitary napkins

Hotel accommodation (Below ₹1,000 per day)

Colouring and picture books (for children)

Children’s drawing books

Manuscripts

Music books

Palmyra jaggery

Preserved vegetables

Hulled cereal grains, etc.

The implementation of GST has successfully impacted the Indian economy. Apart from the simplified tax structure, the other positives include increased exports and an increase in pricing competition.

GST Rates FAQs

What are the current GST rates?

The current GST rates charged on goods and services range from 0% to 28%.

What are the 5 slabs of GST rate?

The 5 slabs of GST rate are as follows:

  • 0%: Nil-rated items like essential food items, educational books, etc.

  • 5%: Necessary items like milk, bread, salt, etc. 

  • 12%: Goods and services like processed foods, garments, mobile phones, etc.

  • 18%: Items like televisions, washing machines, air conditioners, etc. 

  • 28%: Highest rate for demerit goods like cigarettes, pan masala, aerated beverages, etc.

What are the 4 types of GST?

The 4 GST types are as follows:

1. Central Goods and Services Tax (CGST): It is collected by the central government on the interstate supply of goods and services. It replaced central taxes like excise duty and service tax.

2. State Goods and Services Tax (SGST): It is collected by the state government on intrastate supply of goods and services. It replaced state taxes like VAT, entertainment tax, and sales tax.

3. Integrated Goods and Services Tax (IGST): It is charged on interstate supply of goods and services. The revenue is shared among relevant states. IGST simplifies the tax process for interstate trade.

4. Union Territory Goods and Services Tax (UTGST): It is applicable on goods and services within Union Territories, replacing SGST. UTGST is collected in addition to CGST.

Remember, UTGST is applicable only within union territories, while the other three types are applicable throughout India.

Who should pay the GST rate?

GST is generally a consumption-based tax and is usually paid by the end consumer. Throughout the supply chain, from manufacturers to retailers, each entity collects GST on behalf of the government. The responsibility to remit the collected GST to the government lies with the registered business or entity involved in the sale of goods or services.

What items in India have the highest GST rate?

Some of the goods and services that carry the highest GST rate of 28% include:

  • Cigarettes, pan masala, and tobacco products

  • Aerated beverages exceeding the specified threshold of sugar/sweeteners

  • Luxury cars exceeding the specified engine capacity

 

This is not an exhaustive list. Refer to the official Central Board of Indirect Taxes and Customs (CBIC) website to check the GST rates charged on different items.

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