The GST rate slabs are decided by the GST Council. The GST Council revises the rate slab of goods and services periodically. The GST rates are usually high for luxury supplies and low for essential needs. In India GST rate for various goods and services is divided into four slabs: they are 5% GST, 12% GST, 18% GST, & 28% GST.
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The GST rates for various products have been revised several times by the GST council since the inception of the Goods and Services Tax (GST). The latest rate revision was brought into effect in the 41st GST Council Meeting which was held on Aug 27, 2020. Before that, there have been many GST Council Meetings in which certain rate revisions were introduced.
The details in respect to these rate revisions and other major things are being discussed below:
Revision of GST Rates announced in the 44th GST Council Meeting
GST rates on Covid-related essentials
| Covid-related essentials | Present GST rate | Revised GST rate |
|---|---|---|
| Pulse oximeters | 12% | 5% |
| Hand sanitisers | 18% | 5% |
| Equipment to check body temperature | 18% | 5% |
| Furnaces for cremation and their installation | 18% | 5% |
| Ambulances | 28% | 12% |
GST rates on Covid medicines and tasting kits
| Covid-related medicines and testing kits | Present GST rate | Revised GST rate |
|---|---|---|
| Testing kits | 12% | 5% |
| Specified inflammatory diagnostic kits | 12% | 5% |
GST rates on oxygen and oxygen-related medical devices
| Oxygen and oxygen-related medical devices | Present GST rate | Revised GST rate |
|---|---|---|
| Medical grade oxygen | 12% | 5% |
| Oxygen concentrator or generator | 12% | 5% |
| Ventilators | 12% | 5% |
| Mak, canula, or helmet | 12% | 5% |
| BiPAP machine | 12% | 5% |
| High flow nasal canula device | 12% | 5% |
GST rates on Covid-related drugs
| Covid-related drugs | Present GST rate | Revised GST rate |
|---|---|---|
| Tocilizumab | 5% | NIL |
| Amphotericin B | 5% | NIL |
| Heparin and other anti-coagulants | 12% | 5% |
| Remdesevir | 12% | 5% |
| Any other drugs recommended by ministry of health | NA | 5% |
Revision of GST Rates announced in the 43rd GST Council Meeting
- GST on the export of relief goods to be exempted and will stay in effect until 31 August 2021.
- GST on import of medicine for black fungus, that is Amphotericin B is also placed under the exemption list.
- Any Covid-related relief item if imported even with the intention of donating to the government or any relief organization will be exempted from IGST till 31 August 2021.
- Amnesty Scheme was announced by the finance minister to reduce late fee returns. Small taxpayers can file returns under this scheme.
- A group of ministers will be formed who will submit a report by 8 June 2021 to determine whether the rates are to be increased or decreased.
Revision of GST Rates announced in the 42nd GST Council Meeting
Highlights of the meeting held on 5 October 2020
- Small taxpayers with turnover of less than Rs.5 crore can now file quarterly GSTR-3B and GSTR-1 where the due date for GSTR-1 will be the 13th day of the month succeeding the quarter. This new rule came into effect on 1 January 2021. Due to the implementation of this rule, the number of returns has reduced to 8 from 24.
- The quarterly taxpayers have the option of paying 35% of the net tax liability of the previous quarter, using an auto-generated challan for the first two months of the quarter.
- For the auto-generation of GSTR-3B, a roadmap is prepared, where the details of the supplier’s GSTR-1 will help in auto-populating the ITC. GSTR-1 will help in auto-populating the tax liability as well. Hence, it is important to mandatorily file GSTR-1 before filing GSTR-3B. This rule came into effect on 1 April 2021.
- Taxpayers will pay their GST through a simple challan.
- Taxpayers with a turnover of Rs.5 crore and above will have to mention a 6-digit HSN code. A 4-digit HSN code is to be mentioned by taxpayers with a turnover of less than Rs.5 crore. This rule came into effect on 1 April 2021.
- Bank accounts which have their PAN linked with Aadhaar will be able to receive refunds.
- ISRO, Antrix Corporation, and New Space India Limite (NSIL) will receive GST exemptions to encourage the space launching services in India.
- Sanitisers that are non-alcoholic will be continued to be taxed at 18% GST.
- The compensation cess collected till date amounts to Rs.20,000 crore. This amount was disbursed to specific states in India by 5 October 2020.
- Rs.25,000 crore towards IGST 2017-18 was distributed to specific Indian states.
Highlights of the meeting held on 12 October 2020
- The meeting ended with no unanimity on the issue of borrowing. The states may avail of the options previously provided to borrow funds.
- The compensation cess will be levied will beyond the 5-year tenure.
- The center cannot borrow in case of shortage of compensation cess fund as it will create an increase in the yield of G-sec bonds.
- A borrowing calendar has been issued where if the borrowing goes beyond the sanctioned limit, the G-Sec deals used as a benchmark for every other borrowing will increase.
- Cess collected from July 2022 will not be disbursed to states in India and will be used for the payment of principal and interest. This will help in exempting the state from the burden of repaying the borrowed amount.
Revision of GST Rates announced in the 41st GST Council Meeting
The 41st GST Council meeting was chaired by the Union Finance Minister Nirmala Sitharaman and was held on 27 August 2020. The government will provide an additional 0.5% relaxation in states where the borrowing limit is under the FRBM Act. States can borrow more due to the injury that has been caused by the coronavirus outbreak. Two options have been provided to the states to meet the compensation cess shortfall.
Revision of GST Rates announced in the 40th GST Council Meeting
The 40th GST Council meeting was chaired by the Union Finance Minister Nirmala Sitharaman and was held on 12 June 2020. As per the meeting, no late fee will be levied for taxpayers that come under nil tax liability. In case taxpayers file the returns between 1 July 2020 and 30 September 2020, the maximum late fee that can be charged is Rs.500. In the case of small taxpayers (aggregate turnover of up to Rs.5 crore), the rate of interest has been reduced to 9% from 18% p.a. for GST returns that are filed for February, March, and April 2020. However, the returns must be filed before 30 September 2020.
Revision of GST Rates announced in the 39th GST Council Meeting
The following table reflects the changes in the rates applicable to the goods and services:
| Goods or commodities | New rate | Old rate |
|---|---|---|
| Handmade matches | 12% | 5% |
| Mobile phones | 18% | 12% |
| Other handmade matches | 12% | 18% |
| Aircraft MRO services | 5% along with full ITC | 18% |
Announced on 14 March 2020, the rates mentioned above are applicable w.e.f. 1 April 2020.
Revision of GST Rates announced in the 38th GST Council Meeting
The following table reflects the changes in the rates applicable to the goods and services:
| Goods or commodities | New rate | Old rate |
|---|---|---|
| Sacks of polythene and polypropylene | 18% | 12% |
| State owned lotteries | 28% | 12% |
| State authorised lotteries | 28% | 28% |
| Woven and non-woven fabrics | 18% | 12% |
Announced on 18 December 2019, the rates mentioned above are applicable w.e.f. 1 January 2020. Rates for the lotteries are applicable w.e.f. 1 March 2020.
Revision of GST Rates announced in the 37th GST Council Meeting
Announced on September 20th, 2019, the following table reflects the changes introduced in the rates applicable to the goods and services. These changes are applicable w.e.f. from 1 October 2019.
| Goods or commodities | New rate | Old rate |
|---|---|---|
| Plates and cups made of tree products | Nil | 5% |
| Caffeinated Beverages | 28% + 12% cess | 18% |
| Supplies of Railways wagons & coaches (without the refund of accumulated ITC) | 12% | 5% |
| Outdoor Catering (without the ITC) | 5% | 18% |
| Diamond Job work | 1.50% | 5% |
| Other Job work | 12% | 18% |
| Hotels with Room Tariff of Rs.7501 and above | 18% | 28% |
| Hotels with Room Tariff from Rs 1,001 to Rs 7,500 | 12% | 18% |
| Woven or non-woven Polyethylene Packaging bags | 12% | 18% |
| Marine fuel | 5% | 18% |
| Almond Milk | 18% | - |
| Slide fasteners | 12% | 18% |
| Wet grinders (consisting of stone as a grinder) | 5% | 12% |
| Dried Tamarind | Nil | 5% |
| Semi-precious stones- cut & polished | 0.25% | 3% |
| Specified goods for petroleum operation under Hydrocarbon Exploration Licensing Policy | 5% | Applicable rate |
| Cess on Petrol Motor Vehicles (Capacity of 10-13 passengers) | 15% | 1% |
| Cess on Diesel Motor Vehicles (Capacity of 10-13 passengers) | 15% | 3% |
Revision of GST Rates announced in the 36th GST Council Meeting
The following table reflects the changes in the rates applicable to the goods and services:
| Goods or commodities | New rate | Old rate |
|---|---|---|
| Electric chargers | 5% | 18% |
| Electric vehicles | 5% | 12% |
These rates were revised on July 27th, 2019 and is applicable w.e.f. August 1st, 2019.
Revision of GST Rates announced in the 31st GST Council Meeting
The following table reflects the changes in the rates applicable to the goods and services:
| Goods or commodities | New rate | Old rate |
|---|---|---|
| Vegetables which are preserved provisionally but are not suitable for immediate consumption | 5% | Nil |
| Cooked or uncooked vegetables which are steamed, frozen or boiled (branded) | 5% | Nil |
| Music Books | 12% | Nil |
| Parts for manufacturing renewable energy devices falling under chapter 84, 85 or 94 of Tariff | - | 5% |
| Natural cork | 12% | 5% |
| Fly ash blocks | 12% | 5% |
| Walking sticks | 12% | 5% |
| Marble rubble | 18% | 5% |
| Agglomerated cork | 18% | 12% |
| Cork roughly squared or debugged | 18% | 12% |
| Articles of Natural cork | 18% | 12% |
| Movie Tickets worth Rs.100 or less | 18% | 12% |
| Premium on Third party insurance on Vehicles | 18% | 12% |
| Accessories for Handicapped Mobility Vehicles | 28% | 5% |
| Power banks | 28% | 18% |
| Movie Tickets worth more than Rs.100 | 28% | 18% |
| Video game consoles, equipments used for Billiards and Snooker and other sport related items of HSN code 9504 | 28% | 18% |
| Retreated & used pneumatic Rubber Tyres | 28% | 18% |
| Colour Television Sets & monitors up to “32 Inches” | 28% | 18% |
| Digital & Video Camera recorders | 28% | 18% |
| Pulleys, transmission shafts, cranks and gear boxes under HSN 8483 | 28% | 18% |
| Reduction of tax rates on Air travel of pilgrims | 28% | 18% |
Commodities and Services GST rates
The GST Council has proposed a four-tier tax structure wherein rates are either nil or very low so far as essential food items are concerned. The reason for this is that these food items constitute around 50% of the consumer basket, and contributes significantly towards ensuring that widespread inflation is kept in check even after the revised tax slabs under GST have been implemented. Negative items and luxury goods, however, are expected to be taxed at a considerably higher rate to maintain revenue neutrality for state and central governments following the implementation of the new GST rates. Other precious metals are likely to see the implementation of an extra concessional GST tax slab as these metals are currently taxed at just 1% under VAT.
Following is a table of commodities and services and the GST rates applicable to them:
| Commodities / Services | GST Rate |
|---|---|
| Items that are not listed in any other category, such as electrical appliances, oil, soaps, etc. | 18% |
| All services like professional charges, fees, insurance, banking, restaurants, telecom, etc. | 18% |
| Essential farm produced mass consumption items such as wheat, rice, food grains, etc. | NIL |
| Mass consumption and common use food items like mustard oil, tea, spices, etc., but not including processed foods | 5% |
| Processed foods | 12% |
| Cars and white goods | 28% |
| De-merits and luxury goods and items that fall under the sin category, such as aerated drinks, tobacco, luxury cars, pan masala, etc. | 28% + CESS |
GST Council implements rate cuts leaving 35 goods in the highest tax bracket
By July 2018, the GST Council reduced tax rates on 191 goods, leaving only 35 items in the 28% tax category. Some of these include:
- AC
- Dishwashing machines
- Digital cameras
- Cement
- Video recorders
- Parts of automobiles
- Motor vehicles
- Tyres
- Yachts
- Aircrafts
- Aerated drinks
- Sin items such as tobacco, cigarette, and pan masala
At the time of GST rollout, there were 226 goods in the highest tax slab. Over a period of 1 year, the GST Council has slashed the taxation rates for 191 items in total. The highest tax slab may be further rationalised to ensure that only sin goods and super luxury goods are taxed at 28%.
FAQs on GST rates
- What is the GST rate for gold?
- What is the GST rate charged on mobile phones?
- What is the GST rate charged on two-wheelers?
- What is the GST rate charged on television sets?
- What is the GST rate for lac?
- What is the GST rate for coffee?
The GST on gold is 3% of its value. However, if the gold is converted into ornaments, an additional 5% GST is charged on the making charges. Thus, a total of 8% GST is charged on gold ornaments.
At present, the GST charged on mobile phones is 12%.
At present, the GST charged on two-wheelers is 28%, which is the highest slab for GST. However, there have been petitions to reduce the GST on two-wheelers to 18%.
At present, the GST charged on television sets is 18% for TVs of up to 32 inches. For TVs that are bigger than 32 inches, the GST charged is 28%.
The GST rate for lac is 3%.
The GST rate for coffee is 28%.
