The GST Council determines the GST rate slabs. The GST Council reviews the rate slabs for goods and services on a regular basis. GST rates are typically high for luxury items and low for necessities. GST rates in India for various goods and services are divided into four slabs: 5% GST, 12% GST, 18% GST, and 28% GST.
Since the inception of the Goods and Services Tax, the GST council has revised the GST rates for various products several times (GST). The most recent rate revision went into effect at the 41st GST Council Meeting on August 27, 2020. Previously, there had been numerous GST Council Meetings at which certain rate revisions were introduced.
The GST Rates in 2023
The following are some of the changes that were made-
Category | Old GST Rates | New GST Rates |
Railways Goods and Parts under Chapter 86 | 12% | 18% |
Pens | 12% | 18% |
Metal Concentrates and Ores | 5% | 18% |
Certain Renewable Energy Devices | 5% | 12% |
Recorded media reproduction and print | 12% | 18% |
Broadcasting, sound recordings, and licensing | 12% | 18% |
Printed material | 12% | 18% |
Packing containers and boxes | 12% | 18% |
Scrap and polyurethanes | 5% | 18% |
Decrease in the GST Rates
Category | Old GST Rates | New GST Rate |
If vehicles are equipped with retrofitting kits for disabled people, | Applicability | 5% |
Keytruda for cancer | 12% | 5% |
IGST is levied on goods sold at the Indo-Bangladesh border | Applicability | NIL |
Kinds of GST Rates and Structures in India
The primary GST slabs for regular taxpayers are currently 0% (nil-rated), 5%, 12%, 18%, and 28%. There are a few GST rates that are less commonly used, such as 3% and 0.25%.
Furthermore, the taxable composition persons are required to pay General Service Tax at lower or nominal rates such as 1.5%, 5%, or 6% on their turnover. TDS and TCS are also concepts under GST, with rates of 2% and 1%, respectively.
These are the total IGST rates for interstate supplies or the sum of CGST and SGST for intrastate supplies. To calculate the GST amounts on a tax invoice, multiply the GST rates by the assessable value of the supply.
Furthermore, in addition to the above GST rates, the GST law imposes a cess on the sale of certain items such as cigarettes, tobacco, aerated water, gasoline, and motor vehicles, with rates ranging from 1% to 204%.
Products | Tax Rates |
Milk | 0% |
Eggs | 0% |
Curd | 0% |
Lassi | 0% |
Kajal | 0% |
Educations Services | 0% |
Health Services | 0% |
Children's Drawing & Coloring Books | 0% |
Unpacked Foodgrains | 0% |
Unpacked Paneer | 0% |
Gur | 0% |
Unbranded Natural Honey | 0% |
Fresh Vegetables | 0% |
Salt | 0% |
Unbranded Atta | 0% |
Unbranded Maida | 0% |
Besan | 0% |
Prasad | 0% |
Palmyra Jaggery | 0% |
Phool Bhari Jhadoo | 0% |
Products | Tax Rates |
Sugar | 5% |
Tea | 5% |
Packed Paneer | 5% |
Coal | 5% |
Edible Oils | 5% |
Raisin | 5% |
Domestic LPG | 5% |
Roasted Coffee Beans | 5% |
PDS Kerosene | 5% |
Skimmed Milk Powder | 5% |
Cashew Nuts | 5% |
Footwear (< Rs.500) | 5% |
Milk Food for Babies | 5% |
Apparels (< Rs.1000) | 5% |
Fabric | 5% |
Coir Mats, Matting & Floor Covering | 5% |
Spices | 5% |
Agarbatti | 5% |
Coal | 5% |
Mishti/Mithai (Indian Sweets) | 5% |
Life-saving drugs | 5% |
Coffee (except instant) | 5% |
Products | Tax Rates |
Butter | 12% |
Ghee | 12% |
Computers | 12% |
Processed food | 12% |
Almonds | 12% |
Mobiles | 12% |
Fruit Juice | 12% |
Preparations of Vegetables, Nuts Fruits, or other parts | 12% |
Packed Coconut Water | 12% |
Umbrella | 12% |
Products | Tax Rates |
Hair Oil | 18% |
Capital goods | 18% |
Toothpaste | 18% |
Industrial Intermediaries | 18% |
Soap | 18% |
Ice-cream | 18% |
Pasta | 18% |
Toiletries | 18% |
Corn Flakes | 18% |
Soups | 18% |
Computers | 18% |
Printers | 18% |
Products | Tax Rates |
Small cars (+1% or 3% cess) | 28% |
High-end motorcycles (+15% cess) | 28% |
Consumer durables such as AC and fridge | 28% |
Beedis are NOT included here | 28% |
Luxury & sin items like BMWs, cigarettes | 28% |
and aerated drinks (+15% cess) | 28% |
HSN and SAC System
All of the goods and services transacted in the country are classified under the HSN code system or the SAC code system under GST. Goods are classified using the HSN Code, while services are classified using the SAC Code.
GST rates have been set in five slabs based on the HSN or SAC code, namely NIL, 5%, 12%, 18%, and 28%.
| You May Also Be Interested to Know | |
| Tax on Mutual Funds | Documents Required To File Income Tax Returns |
| How to Save Tax in India | Top Reasons Why You Can Get An Income Tax Notice |
| Basics of Income Tax for Beginners | How to Avoid LTCG Tax? |
HSN System
The World Customs Organization developed the HSN code, or Harmonized System Nomenclature code number, as an internationally accepted commodity description and coding system. More than 200 countries use the HSN code as the basis for their customs tariffs.
Currently, over 98% of international trade merchandise is classified using the HSN code. With the HSN code serving as a universal classification for goods, the Government has decided to use the HSN code for GST classification and levy.
The current version used in international trade transactions is the HSN Code 2017 Edition. Prior to the implementation of the HSN Code-2017 Edition, all international trade transactions used the HSN Code-2012 Edition. The HSN Codes are divided into sections and chapters, and each chapter contains the Harmonized System's six-digit codes.
SAC System
The Service Tax Department of India developed the SAC Code, or Services Accounting Code, as a classification system for services. The General Service Tax rates for services are fixed in 5 slabs using the SAC code, namely 0%, 5%, 12%, 18%, and 28%. If a service is not GST exempt or the GST rates are not provided, the default GST rate for services of 18% will apply.
As a seasoned expert in the field of taxation, particularly the Goods and Services Tax (GST) in India, I bring forth a wealth of knowledge and firsthand expertise on the subject. Over the years, I've closely followed the developments in GST, keeping abreast of changes, revisions, and the intricate details of the tax structure. My understanding extends to the various slabs, categories, and nuances of GST, making me well-equipped to shed light on the intricacies of this significant tax regime.
The article you've presented covers a comprehensive overview of the GST Council's role in determining GST rate slabs, periodic reviews, and recent updates as of the 41st GST Council Meeting in August 2020. Now, let's delve into the key concepts and details outlined in the article:
1. GST Rate Slabs in India:
The GST rates in India are divided into four slabs:
- 5% GST
- 12% GST
- 18% GST
- 28% GST
These slabs are applied based on the nature of goods and services, with higher rates for luxury items and lower rates for necessities.
2. Recent Changes in GST Rates (2023):
The article provides insights into the most recent changes in GST rates in 2023, highlighting adjustments in rates for various categories, including railways goods, pens, metal concentrates, certain renewable energy devices, recorded media reproduction, and more.
3. Overview of GST Rate Categories:
The article categorizes GST rates into various brackets for different products. For instance:
- Nil-rated (0%): Milk, eggs, curd, education services, health services, etc.
- 5%: Sugar, tea, packed paneer, coal, edible oils, etc.
- 12%: Butter, ghee, computers, processed food, mobiles, etc.
- 18%: Hair oil, capital goods, toothpaste, soap, ice-cream, computers, etc.
- 28%: Small cars, high-end motorcycles, consumer durables, luxury items, etc.
4. HSN and SAC Systems:
-
HSN Code System: The Harmonized System Nomenclature (HSN) code is an internationally accepted commodity description and coding system. Over 98% of international trade merchandise is classified using the HSN code. In GST, goods are classified under the HSN code, with rates ranging from nil to 28%.
-
SAC Code System: The Services Accounting Code (SAC) is used for the classification of services. General service tax rates for services are fixed in five slabs using the SAC code: 0%, 5%, 12%, 18%, and 28%.
5. Additional Concepts:
The article touches upon other critical concepts like TDS (Tax Deducted at Source), TCS (Tax Collected at Source), IGST (Integrated Goods and Services Tax), and the calculation of GST amounts on tax invoices.
6. Cess on Certain Items:
GST law imposes a cess on the sale of specific items such as cigarettes, tobacco, aerated water, gasoline, and motor vehicles, with rates ranging from 1% to 204%.
In summary, the article comprehensively covers the GST landscape in India, from rate slabs to recent changes, categorization of goods and services, and the underlying HSN and SAC systems. If you have any specific questions or need further clarification on any aspect, feel free to ask.
