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.
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 |
Learn more about the GST rate on labour charges.
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. |
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) |
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. |
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. |
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.
For more information on GST, remember to visit Bajaj Markets.