Last Update Date : April 29, 2019
GST Tax Rates
Have you ever wondered, why you should pay taxes? Each year when tax day rolls around, all of get busy in filing our individual Income Tax returns to the Income Tax Department (ITD). Paying taxes is a civic duty and requirement as per law because the taxes paid are for the development and progression of the country. Now from the other perspective if we talk about the Goods and Services Tax (GST), we buy things at stores where we pay sales tax to the seller. When it comes to service tax, we avail the services when we eat out at restaurants and hotels along with our family and friends where we pay the service tax.
After the roll out of GST by the Government, different tax rates were imposed on more than 5000 goods and services as per their category, which this guide covers.
Table of Content
GST Introduction
Goods and Service Tax (GST) is a consumption based indirect tax on supply of goods, or services or both, except for taxes on the supply of the alcoholic liquor for human consumption. The taxable event in GST is supply of goods or services or both. Various taxable events like manufacture, sale, rendering of service, purchase entry into a territory of a state etc., have been done away with in favor of just one event i.e., supply. GST is a dual tax system as outlined below:
- Central GST (CGST) – To be charged by the Central Government
- State GST (SGST) – To be charged by the State Government
- Integrated GST (IGST) – To be charged by Central Government on the inter-state supply of various goods and services
[ Read: Types of GST ]
HSN Code
HSN refers to Harmonized System of Nomenclature and is developed by the World Customs Organization (WCO) that differentiates more than 5000 goods from all over the world in a systematic manner. HSN is a unique eight-digit number where the different classifications are used for GST taxation purposes. The HSN system is being implemented in Central Excise and Customs and is now applicable in India after implementation of GST.
GST Tax Rate – An Overview
The GST bill was a major point of discussion across the country due of its ability to change the entire indirect tax system of India. The GST council had finally announced the GST rates and there was curiosity and ambiguity in the industry as to its impact on their individual businesses. Due to the uniformity in taxes for different services and commodities across the country as per their category, there will be a larger impact on Inflation along with clarity to the vendors.
GST is categorized into seven different slabs NIL rate, 0.25%, 3%,5%, 12%, 18% and 28%.
Structure of GST Rates
The different product rates of GST goods that are updated as per the CBEC updates can be referred by clicking here: (Click on GST laws, rules and select GST Rates to download GST rates booklet(pdf))
| Products at NIL Rate | Products at 0.25% | Products at 3% | Products at 5% | Products at 12% | Products at 18% | Products at 28% |
| Live bovine animals | Precious stones (other than diamonds) and semi-precious stones, unworked or simply sawn or roughly shaped | Pearls, natural or cultured, whether or not worked or graded but not strung, mounted or set; pearls, natural or cultured, temporarily strung for convenience of transport | Fish, frozen, excluding fish fillets and other fish meat of heading 0304 | Live horses | Condensed milk | Chewing gum / bubble gum and white chocolate, not containing cocoa |
| Curd; Lassi; Butter milk | Precious stones (other than diamonds) and semi-precious stones, unworked or simply sawn or roughly shaped | Silver (including silver plated with gold or platinum), unwrought or in semi-manufactured forms, or in powder form | Milk and cream, concentrated or containing added sugar or other sweetening matter, including skimmed milk powder, milk food for babies [other than condensed milk] | Meat of sheep or goats, frozen and put up in unit containers | Vegetable saps and extracts; pectic substances, pectinates and pec-tates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products. | Cocoa powder, not containing added sugar or sweetening matter |
| Potatoes, fresh or chilled. | Synthetic or reconstructed precious or semi-precious stones, unworked or simply sawn or roughly shaped | Gold (including gold plated with platinum) unwrought or in semi-manufactured forms, or in powder form | Cream, yogurt, kephir and other fermented or acidified milk and cream, whether or not concentrated or containing added sugar or other sweetening matter or flavoured or containing added fruit, nuts or cocoa | Butter and other fats (i.e. ghee, butter oil, etc.) and oils derived from milk; dairy spreads | Pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such as spaghetti, macaroni, noodles, lasagne, gnocchi, ravioli, cannelloni; couscous, whether or not prepared | Chocolates and other food preparations containing cocoa |
| Tomatoes, fresh or chilled. | Base metals or silver, clad with gold, not further worked than semi-manufactured | Natural honey, put up in unit container and bearing a registered brand name | Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, dried | Curry paste | Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes | |
| Onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled. | Cashewnuts, whether or not shelled or peeled | Tomatoes prepared or preserved otherwise than by vinegar or acetic acid | Mayonnaise and salad dressings | Perfumes and toilet waters | ||
| Cabbages, cauliflowers, kohlrabi, kale and similar edible brassicas, fresh or chilled. | Edible products of animal origin, not elsewhere specified or included | Vegetables, fruit, nuts, fruit-peel and other parts of plants, preserved by sugar (drained, glacé or crystallised) | Soups and broths and preparations therefor; homogenised composite food preparations | Fireworks, signalling flares, rain rockets, fog signals and other pyrotechnic articles | ||
| Coconuts, fresh or dried, whether or not shelled or peeled | Fruit and nuts, uncooked or cooked by steaming or boiling in water, frozen, whether or not containing added sugar or other sweetening matter | Soya Milk Drinks | Ice cream and other edible ice, whether or not containing cocoa | |||
| Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh. | Coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes containing coffee in any proportion [other than coffee beans not roasted] | Waters, including natural or artificial mineral waters and aerated wa-ters, not containing added sugar or other sweetening matter nor fla-voured | ||||
| Grapes, fresh,Apples, pears and quinces, fresh. | Tender coconut water put up in unit container and bearing a registered brand name | Vinegar and substitutes for vinegar obtained from acetic acid | ||||
| Coffee beans, not roasted | Tea, whether or not flavoured [other than unprocessed green leaves of tea] | Coal | Granite blocks | Oils and other products of the distillation of high temperature coal tar; similar products in which the weight of the aromatic constituents ex-ceeds that of the non-aromatic constituents, such as Benzole (ben-zene), Toluole (toluene), Xylole (xylenes), Naphthelene | ||
| Flour, of potatoes [other than those put up in unit container and bearing a registered brand name] | Ginger other than fresh ginger, saffron, turmeric (curcuma) other than fresh turmeric, thyme, bay leaves, curry and other spices | Beverages containing milk | Hair oil | |||
| Kajal [other than kajal pencil sticks], Kumkum, Bindi, Sindur, Alta | Marble and travertine blocks | Soap; organic surface-active products and preparations for use as soap, in the form of bars, cakes, moulded pieces or shapes, whether or not containing soap | ||||
| Cheques, lose or in book form | ||||||
| Coconut, coir fibre | ||||||
| Indian National Flag | ||||||
| Newspapers, journals and periodicals, whether or not illustrated or containing advertising material | Domestic LPG | |||||
| Salt, all types | PDS Kerosene | |||||
| Electrical energy | Footwear (< Rs.500) | |||||
| Firewood or fuel wood | Apparels (< Rs.1000) | |||||
| Postal items, like envelope, Post card etc., sold by Government | Coir Mats, Matting & Floor Covering | |||||
| Rupee notes when sold to the Reserve Bank of India | Agarbatti | |||||
| Newspapers, journals and periodicals, whether or not illustrated or containing advertising material | Mishti/Mithai (Indian Sweets) |
GST Tax Rate on Services
The GST tax rate for the services is again categorized into five different slabs as NIL rate, 5%, 12%, 18%, 28% rates.
Let us see the most common services along with the GST tax rate applicable as below.
Services at NIL Rate
- Transport of goods or passengers;
- Services by way of renting of residential dwelling for use as residence.
- Service by way of access to a road or a bridge on payment of toll charges.
- Transmission or distribution of electricity by an electricity transmission or distribution utility.
- Services by way of loading, unloading, packing, storage or warehousing of rice
Services at 5% Rate
- Transport of passengers by rail in first class or air conditioned coaches
- Transport of passengers by air in economy class
- Transport of goods by rail
- Transport of goods in a vessel
- Leasing of aircrafts by a scheduled airlines for scheduled operations
Services at 12% Rate
- Supply of food/drinks in restaurant not having facility of air-conditioning or central heating at any time during the year and not having license to serve liquor
- Transport of passengers by air in other than economy class
- Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having room tariff Rs.1000 and above but less than Rs.2500 per room per day
- Transport of goods in containers by rail by any person other than Indian Railways
- Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) right in respect of goods other than Information
- Technology software.
Services at 18% Rate
- Supply of Food/drinks in restaurant having licence to serve liquor
- Supply of Food/drinks in restaurant having facility of air-conditioning or central heating at any time during the year
- Supply of Food/drinks in outdoor catering
- Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes where room tariff of Rs 2500/- and above but less than Rs 7500/- per room per day
- Services by way of admission to exhibition of cinematography films where price of admission ticket is one hundred rupees or less.
Services at 28% Rate
- Accommodation in hotels including 5 star and above rated hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, where room rent is Rs 7500/- and above per day per room
- Services by way of admission to entertainment events or access to amusement facilities including exhibition of cinematograph films, theme parks, water parks, joy rides, merry-go rounds, go-carting, casinos, race-course, ballet, any sporting event such as Indian Premier League and the like
- Services provided by a race club by way of totalisator or a license to bookmaker in such club
- Gambling
Frequently Asked Questions
1. Which of the existing taxes are proposed to be subsumed under GST?
Here are the following taxes that are replaced by GST
- Taxes currently levied and collected by the Centre:
- Duties of Excise (Medical and Toilet Consumables)
- Central Excise duty
- Additional Duties of Excise (Textiles and Textile Products)
- Special Additional Duty of Customs (SAD)
- Additional Duties of Excise (Goods of Special Importance)
- Central Surcharges and Cesses so far as they relate to supply of goods and services
- Additional Duties of Customs (commonly known as CVD)
- Service Tax
- State taxes that are subsumed under GST:
- Entry Tax (all forms) and Luxury Tax
- Taxes on advertisements
- State VAT & Central Sales Tax
- Amusement and Entertainment Tax (except when imposed by the local bodies)
- Taxes on lotteries, betting and gambling
- Purchase Tax
- State Surcharges and Cesses as they relate to supply of goods and services
2. What is the treatment applied for Tobacco and Tobacco products under the GST regime?
Tobacco and tobacco products would be subject to GST. Also, the Centre would have the power to levy Central Excise duty on these products.
3. Why is Dual GST required?
India being a federal country due to which both the Centre and the States have been assigned the powers to levy and collect taxes through proper legislation. Both Centre and State Governments will have diverse responsibilities to perform according to the division of powers approved in the Constitution for which they need to raise resources.
The dual GST system backed by the Constitutional requirement is therefore applied in a federal country like India.
4. Which authority will levy and administer GST?
Centre will charge taxes and administer CGST & IGST while respective states /UTs will levy and administer SGST/ UTGST.
5. Who will decide rates for levy of GST?
The CGST and SGST would be imposed at rates to be jointly decided by the Centre and State governments. The rates would be notified on the recommendations of the GST Council.
While, a majority of points were covered in this guide, taxpayers still continue to find themselves admist difficulties and misunderstandings. For all your GST related queries, including registration, compliance and reconciliation enlist the aid of the experts at H&R Block India.
