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  • GST 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 4 types of GST:

    • CGST – It is short for Central GST.
    • SGST – It is short for State GST.
    • IGST – It is short for Integrated GST.
    • UTGST - It is short for Union Territory 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. 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.

    UTGST - It will be imposed and collected by the Union Territory (UT) governments. It is applicable to the supply of goods and services that occur in the Union Territories of India. There are 5 Union Territories in India. They are Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli, Daman and Diu, and Chandigarh. This is charged along with the Central Goods and Services Tax (CGST). Hence, for a transaction in a Union Territory, the tax charged is the sum of both CGST and UTGST. The CGST is collected by the central government, while the UTGST is collected by the UT government.

    GST Rates in India 2018:

    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
    1) 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%

    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 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%.

    News about GST Rates

    • Maharashtra collects 28% more revenue in April - July 2018 over the same period last year: GST Bonus

      The revenue collections from the Goods and Services Tax (GST) has come up as a ray of hope for cash-strapped Maharashtra. In the first 4 months of the present financial year, the state has collected as much as Rs.45,626 crore as revenue from GST. As per the data received from the state GST commissioner, the collection amount has witnessed a mammoth jump of 28.3% from the indirect taxes that have been collected between April and July 2017.

      The Goods and Services Tax (GST) regime came onto the scene on 1 July 2017. From April to July 2017, the revenue collection of the state from indirect taxes was Rs.35,548 crore. Maharashtra is one of the leading states in India in terms of GST payments. It comprises of 14.77% share in the country’s GST payments for the period of April to July this year. The total amount of GST paid in India in this period was Rs.3.89 lakh crore and the GST paid in Maharashtra alone was Rs.57,545 crore. However, it is not clear if the same pace of collection in terms of revenue will be carried on as the GST Council has recently cut down the tax rates on as many as 50 items with the aim of rationalising the structure of the indirect tax. Senior officials are of the opinion that the full-scale impact of the rate cut will be evident once the GST returns are filed for the month of August.

      11 September 2018

    • GST: A remedy for all the tax related issues for the real estate sector?

      The Goods and Services Tax (GST) has been the biggest tax reform in the history of India. After its implementation, it has successfully subsumed more 17 Central and state taxes along with 26 cesses. The sole objective of introducing the Goods and Services Tax (GST) was to reduce the cascading effect of tax, reduction of the multiplication of the levy, reduction of the burden of compliance, and so on. One of the sectors that resorted to the Goods and Services Tax (GST) as a remedy for all its tax related problems was the real estate sector.

      Off late the real estate sector has been saddled with too many stumbling blocks such as coping up with the regulatory changed (RERA) slowing domestic economy, geopolitical uncertainty, etc. India ranks a lowly 185 amongst 190 countries in dealing with construction permits and 138 in registering property in the World Bank’s ease of doing business index. The average time taken to acquire a land is 14 months. The Goods and Services Tax (GST) was expected to provide impetus to the sector through the liberation of hidden tax costs, transactions through black money, multiple assessments, audits, and tax procedures. The Goods and Services Tax (GST) was expected to make a massive shift from favouritism to transparency and from the discrete administration to an administration based on policy and system.

      31 August 2018

    • GST Rates Still Leave Scope for Cutting Back Taxes

      Owing to a major shortfall in the revenue, the Centre has evidently paused all rate cuts, which has been estimated at approximately Rs.40,000 crore in the first quarter of the ongoing financial year. This means that structure of the Goods and Services Tax (GST) is still not streamlined which further leads to a haphazard classification of goods and services under the new tax regime.

      The on and off slew of rates and charges under GST only proves that the rate structure has not stabilised. The Centre, currently, is required to make the GST structure as stable as possible in order to increase the tax collection amounts. This increase too will have to be sustainable, or else the indirect tax regime won’t work out for a very long time!

      The applied levy ultimately creates audit chains in the production and income chain of the economy, which further means that these elements have the potential to tap untaxed income. Custom duties, Central GST, IGST, and so on are all part of the divisible pool of taxes. Since the State is entitled to a 42% share in the direct tax collection, the Centre should compensate only the balance for the shortfall of state-level revenue.

      23 August 2018

    • 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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