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GST Rates: List of Goods and Services Tax Slabs

With the Goods and Services Tax (GST), the Indian government introduced the biggest post-independence taxation reform. GST is primarily devised to maintain a uniform taxation structure across the country. It also aims to eliminate the cascade of central and state taxes that were levied previously. The country’s immigration to this tax regime has facilitated the collation of nearly 17 indirect taxes. This uniformity in the taxation scheme across India is undoubtedly a great development. As on February 21, 2021, there were a total of 1.26 crore registered GST taxpayers in India.

The GST regime covers a total of about 1,300 types of goods and 500 types of services. It is, thus, classified into four, notable rate slabs 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.

Understanding GST slab rates

In India, goods and services are categorized under a GST slab for the purpose of taxation. The rates levied for each section depend upon whether the good or service is a need or a luxury. Items of need are taxed at a lower rate, while on the other hand, items of luxury are taxed in the higher bracket. Some goods are excluded from GST, with one of the most recent products being sanitary napkins.

Levied Tax Rate

Type of Product Inclusions

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

Let’s get into some of the goods and services that are included under each GST slab

5% Goods and Service Tax

(Products)

Agarbatti

Biogas

Insulin

Snow and ice

Walking sticks

Indian sweets (mithai)

Natural cork

Edible oil and spices

Cashew nuts/cashew nuts in shell

Coffee and sugar

Stamps/stamp postmarks

Appliances/equipment that aid the disabled

Life-saving drugs

Coir mats and floor covering

Fertilisers, etc.

(Services)

Leasing of aircrafts

Renting a motor cab (without fuel)

Tour operator services

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

Goods transported in a vessel from outside the country

Print media ad space

Transport services in AC vehicles and radio taxis, etc.

12% Goods and Service Tax

(Products)

Frozen meat

Sauces/ketchup/Mustard sauce

Dairy items (apart from milk)

Fruit juices

Sewing machines

Handmade matches

Jewellery box

Diagnostic kits

Notebooks and exercise books

Plastic beads

Corrective glasses, etc.

(Services)

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

Real estate construction for the purpose of sale

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

Intellectual Property rights on a temporary basis

Goods transported in a vessel from outside the country

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

Air travel tickets (excluding economy)

Chit fund services by foremen

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

18% Goods and Service Tax

(Products)

Dental wax

Industrial electronics and transformers

Power banks (Lithium-ion batteries)

Pencil kajal sticks

Aluminum foil

Toothpaste

Plastic tarpaulin

Baby carriages

Furniture (made from bamboo)

Headgears

Television set-top boxes

Stationary (staplers and pencil sharpeners, etc.)

Hair oil

Shampoos

Televisions (up to 32-inch)

Weight-measuring devices (excluding electronic)

Computer monitors (below 17-inch), etc.

(Services)

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

Supply of food and party arrangements

Works’ contracts

Entertainment (circus, folk theatre, cinema, drama)

Outdoor catering

Movie tickets (Above Rs. 100)

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

28% Goods and Service Tax

(Products)

Air conditioners

Cement

Washing machines

Lotteries (state-owned/authorized)

Paint

Aerated beverages

Yachts

Aircrafts

Caffeinated beverages

Tobacco products, etc.

(Services)

Ballet

Go-karting

Racecourse

Gambling

Casinos

Sports events (IPL, ISL, etc.)

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

Goods Exempted from GST

Milk

Kajal

Natural honey

Sanitary napkins

Hotel accommodation (Below Rs. 1,000 per day)

Children’s drawing books

Manuscripts

Colouring and picture books (for children)

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. The uniform tax regime also makes it easier for the taxpayer to understand where his/her money goes. 

For more information on GST, remember to visit Finserv MARKETS.

Lates GST Rates News

The food industry wants the GST rate on packaged snacks and other widely consumed foods to be reduced. 

With all focus on the upcoming GST Council meeting later this March, the demand for lower GST on labelled products and widely used food products is growing. The packaged food industry wants the GST on ready-made and instant food mixes to be reduced.

The packaged food industry is also concerned about the GST rates applied to processes such as chopping, mixing, flavouring, grinding, and slicing fruits and vegetables, which are either 5% or 12%. According to them, these methods should be tax-free in order to enable the elimination of perishable fruit and vegetable waste.

- March 7, 2021

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