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  • GST Rates – Know what is GST and GST Bill Rates

    GST stands for Goods and Services Tax. It is an indirect tax system introduced by the government of India. GST comprises of most of the existing indirect taxes such as VAT, Service Tax, etc. The GST bill was passed in the Lok Sabha in 2017.

    Types of GST:

    There are 3 types of GST:

    • CGST – It is short for Central GST.
    • SGST – It is short for State GST.
    • IGST – It is short for Integrated GST.

    CGST – Here, the tax will be imposed by the central government of India. It will replace excise duty, service tax, SAD (Special Additional Duty), CVD (Countervailing Duty), ADE (Additional Duties of Excise) and other indirect taxes levied by the central government. CGST will be applicable on supplies within a state and the tax revenue will go only to the central government.

    SGST – Here, tax will be imposed by the state government. It will replace sales tax, VAT, entertainment tax, entry tax, luxury tax, Octroi, purchase tax and taxes on lottery. SGST will be applicable on supplies within a state and the tax revenue will go only to the state government.

    Both CGST and SGST will be levied only if the annual turnover is more than Rs.20 lakhs. They both are applicable on free supplies. Registration for both is required only if the turnover is more than Rs.20 lakhs. Dealers can use the Composition Scheme to avail benefits, if the turnover is Rs.50 lakhs.

    IGST – It will be imposed by state and central government together, but is collected by the central government. The revenue is shared by both central and state governments. It will replace Central Sales Tax (CST). It will be applicable on interstate import and supplies. No exemption limit has been defined by the government for this type of GST. If dealers supply in different states, then they have to register for this GST. It will also be applicable on free supplies. For this type of GST, the composition scheme is not available.

    GST Rates in India 2017

    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 consume 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 in order 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 has 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 and super luxury goods are taxed at 28%.

    News about GST Rates

    • Government working towards reducing GST rates

      The Minister of State for Finance Shiv Pratap Shukla recently announced that the GST Council is working towards the rationalisation of Goods and Services Tax (GST) rates. He added that a big announcement regarding the GST will be made by the government very soon. There are 4 different rates which are currently being used under GST. The rates under GST are 5%, 12%, 18%, and 28%.

      In a meeting held in January 2018, the GST Council had decided to cut down the GST rates on 54 services and 29 items. The council had also removed 178 items from the 28% tax slab regime while cutting down taxes on all restaurants outside starred hotels to 5%, in it’s November 2017 meeting. Shukla said that the government is working towards the promotion of growth of small and medium enterprises (SME). The main reason behind this promotion is the fact that SMEs are of great importance to the economy. They are responsible for the development of output, employment, and exports.

      14 June 2018

    • 1.5 Lakh Companies in Mumbai to Register for GST

      It is expected that by Monday around 1.5 lakh companies in Mumbai zone will register and join the GST portal. Until now 65,000 assessees have already joined the portal. Each of the 7 Service Tax Department commissionerates in Mumbai are organizing a 5 day GST Migration Camp to help taxpayers with the migration process. 9,000 firms have been migrated by the ST Commissionerate-VII already.

      8 April 2017

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