GST is the acronym for Goods and Services Tax. It was implemented as a replacement for the former indirect tax system. GST comprises of most of the existing indirect taxes such as VAT, Service Tax, etc. The GST rates have been revised a number of times. Read more interesting facts about the updated GST Rates here.
The GST rates have been revised a number of times since the inception of the Goods and Services Tax (GST). The latest rate revision was brought into effect in the 28th GST Council meeting which was held on 21 July 2018. In this meeting, the council revised the rate of 45 goods and 2 services.
The following table reflects the changes in the rates applicable to the goods and services:
| Goods or commodities | New rate | Old rate |
|---|---|---|
| Rakhi (only if it is not made of semi-precious or precious material) | Nil | 18% |
| Sal leaves and products of the same | Nil | 18% |
| Sanitary napkins | Nil | 12% |
| Raw material for brooms | Nil | 12% |
| Phosphoric acid of fertilizer grade | 5% | 12% |
| Commemorative coins | Nil | 5% |
| Coir pith compost | Nil | 5% |
| Handloom dari | 5% | 12% |
| Stone, wood deities, marble | Nil | 5% |
| Chenille fabrics | 5% | 12% |
| Marine engine | 5% | 28% |
| Jewellery boxes and handbags | 12% | 18% |
| Solid biofuel pellets | 5% | 18% |
| Knitted caps if the retail sales value exceeds Rs.1,000 | 5% | 12% |
| Khali dona | Nil | 18% |
| Textile floor, handmade carpets | 5% | 12% |
| Bamboo flooring | 12% | 18% |
| Ethanol which is sold to companies that are responsible for marketing oil for mixing with fuel | 5% | 18% |
| Unpolished Kota stones and similar items | 5% | 18% |
| Brass kerosene pressure stove | 12% | 18% |
| Handicrafts that are not handmade | 12% | 18% |
| Zip and slide fastener | 12% | 18% |
| Rubber roller that is hand-operated | 12% | 18% |
| Fuel cell vehicle | 12% | 28% |
| Grafting putty, glaziers’ putty, resin cements | 18% | 28% |
| Televisions up to 68cm | 18% | 28% |
| Washing machines | 18% | 28% |
| Food mixers and grinders | 18% | 28% |
| Vacuum cleaners | 18% | 28% |
| Milk coolers, freezers, ice cream freezer, refrigerators, water coolers | 18% | 28% |
| Hair clippers and shavers | 18% | 28% |
| Hair cleaners | 18% | 28% |
| Storage water heaters | 18% | 28% |
| Hand dryers and hair dryers | 18% | 28% |
| Varnishes and paints, lacquers and enamels | 18% | 28% |
| Immersion heaters | 18% | 28% |
| Electric smoothing irons | 18% | 28% |
| Pads for applying cosmetics | 18% | 28% |
| Work trucks that are not fitted with handling/lifting equipments | 18% | 28% |
| Toilet sprays | 18% | 28% |
| Trailers and semi trailers | 18% | 28% |
| Lithium-ion batteries | 18% | 28% |
| Motor vehicles utilised for special purposes | 18% | 28% |
| Scent sprays | 18% | 28% |
| Powder puffs | 18% | 28% |
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 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 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%.
GST Other Pages
- GST Benefits
- GST Bill
- GST Compensation To States
- History Of GST
- GST Limits
- Accounting Of Interest Tax Under GST
- Composition Scheme Rules Under GST
- Differences Between GST & Previous Tax Structure
- First Post GST Budget 2018
- Impacts On GST
- Imports Under GST
- Refund Process Under GST
- Treatment Of Tds Under GST
- Types Of GST
- Voluntary GST Registration
