India’s migration to the GST regime, which subsumed nearly 17 indirect taxes, is perhaps one of the most noteworthy tax-related developments of the past few decades. One of the primary reasons behind this transition was to eliminate the cascading or “tax on tax” effect prevalent earlier.
GST seeks to reduce the overall cost of goods and services by levying a single tax, thus, ensuring uniformity in prices across India. It also makes the taxation system more transparent. This regime covers nearly 1300 varieties of goods and 500 kinds of services, primarily classified across 4 GST rates.
What are the GST Slab Rates?
In India, nearly all goods and services under the purview of GST have been divided into four GST rates – 5%, 12%, 18%, and 28%. The GST council revises inclusions under these rates from time to time in order to ensure efficient pricing of different categories of products.
The rate thus levied depends on whether a good or service is a necessity or luxury. In general, items of need invite a lower tax rate, i.e. 5% or 12%, and luxury products are in the slabs of 18% and 28%.
Apart from these, GST on gold is 3% and 0.25% of semi-precious and rough stones. Also, a minor portion of all goods and services under the GST regime does not invite any tax, including different salt types and, most recently, sanitary napkins.
What is Included Under the 5% GST Rate List?
In terms of goods, this tax slab primarily comprises household necessities. The following list shows a few of the items that invite a 5% GST.
- Edible oil, spices, tea, coffee, and sugar
- Indian sweets or Mithai
- Life-saving drugs and medicines, like insulin
- Numismatic coins
- Ice and snow
- Walking sticks
- Different accessories or carriage parts for differently-abled individuals
- Fly-ash blocks
- Incense sticks and kites
- Natural cork
- Appliances for differently-abled individuals, such as Braille paper, Braille watches, hearing aids, etc.
- Marble rubble
- Cashew nuts
- Matting, coir mats, and floor covering
- Wind-based Atta Chakki or Pawan Chakki
- First-day covers revenue stamps, stamp postmarks, etc.
The services that come under the 5% tax slab are shown in the table below.
|Motor cab renting without incurring the fuel cost||Print media advertisement space|
|Transport services in AC vehicles and radio taxis||Employment in newspaper printing|
|Aircraft leasing||Goods shipped in vessels from outside the national borders|
|Scheduled transport by air or travelling via chartered or non-scheduled flights for pilgrimage purposes|
|Tour operator services|
What Comes Under the 12% GST Slab?
The 12% GST tax rate applies primarily to processed food when speaking of goods. The following table notes a few of the items in this tax slab.
|Frozen food||Other items|
|Frozen meat||Handmade matches|
|Fruit juices||Sewing machines|
|Dairy products, like butter, ghee, and cheese||Diagnostic kits and reagents|
|Sauces, ketchup, and mustard sauce, excluding salad dressing items, mayonnaise, curry paste, mixed dressings, and mixed condiments||Corrective spectacles, glasses for the same and flint buttons|
|Fish knives, ladles, forks, spoons, tongs, cake servers, etc.|
|Fixed Speed Diesel Engines|
|Notebooks and exercise books|
|Two-way radios or walkie-talkies that personnel in defence, paramilitary forces, and police use|
A 12% GST rate is also applicable to the following services.
- Real estate construction for selling purposes
- Hotel accommodation with relevant expense within Rs.1001 and Rs.7500 per day
- Movie tickets priced at or less than Rs.100
- Railway coaches, wagons, or rolling stock sans refund of ITC
- Intellectual Property rights on a temporary basis
- Foremen-led chit fund services
- Food or drinks at joints without AC or liquor license
- Accommodation renting above Rs.1000 and below Rs.2500 per day
- Air travel tickets, excluding economy
- Transportation of goods in containers via rail from a third-party apart from the Indian Railways
What Falls Under the 18% GST Rate?
The lion’s share of all goods and services are included within the 18% GST rate list. The goods that attract 18% GST are –
- Household products, including hair oil, toothpaste, shampoo, etc.
- Salt-glazed stoneware pipes
- Dental wax
- Transformers, industrial electronics
- Plastic tarpaulin
- Pencil sticks for Kajal
- Electrical transformer
- Headgear and its parts
- Non-leather school bags and satchels, shopping bags and handbags made of cotton, jute, artificial plastic, and other materials but excluding basket work or wickerwork
- Precast concrete pipes
- Aluminium foil
- Set-top box for televisions
- All devices for length measuring by hand, like measuring tapes, callipers, etc.
- Computer monitors below 17 inches
- Optical fibre, winding wires, and coaxial cables
- Ball bearing, roller bearing, and related parts and accessories
- Retreaded or second-hand rubber tyres
- Discharge lamps or electrical filaments
- Furniture items made of bamboo
- TVs with monitors up to 32 inches
- Power banks using Lithium-ion batteries
- Sports goods, gaming consoles and other products with HSN code 9504
- Carriages for babies
- Staplers, pencil-sharpening devices
- Rear tractor wheel rims, tractor housing transmissions, tractor centre housing, tractor support front axle
- Weight-measuring devices, apart from electronic ones
- Rear tractor tyres and tyre tubes
- Packs and bags of Polythene and Polypropylene
Some services that invite 18% GST are –
|Food or drinks at joints with AC/heating and/or liquor license||Accommodation renting above Rs.2500 and below Rs.5000 per day||Party arrangement and shamiana, food supplies||Hotel accommodation with related expense at or more than Rs.7501|
|Works contract supply||Outdoor catering||Performance arts, like a circus, theatre, folk, Indian classical, etc.||Movie tickets priced above Rs.100|
What Comes Under 28% GST Rate?
As per the GST rates chart, nearly 200 items invite a tax of 28%. Of these, most are luxury items and sin goods, like cigars. A few of such goods have been mentioned below.
- Caffeinated beverages
- Tobacco products, such as cigarettes
- State-owned and state-authorised lotteries
- Cars and two-wheelers
- Washing machines
- Cement, paint
- Air conditioners
- Cars and two-wheelers
- Dishwashing machines
- Aerated beverages
Alongside GST, cess is also applicable to some of the items mentioned in the list above, like cigarettes, luxury cars, aerated beverages, etc.
Services that attract a 28% tax rate are noted in the following table.
- Racing club services
- Food or drinks at 5-star hotels
- Entertainment services, amusement parks, theme parks, joy rides, etc.
- Sporting events such as IPL, ISL, etc.
Apart from these types of GST rates, few products that do not attract any GST or are exempt from taxation include –
- Natural honey
- Hulled cereal gains
- Sanitary napkins
- Manuscripts, music books
- Unworked bones and horn-cores and their wastes
- Palmyra jaggery
- Preserved vegetables
- Container-packed frozen vegetables
- Colouring books, drawing books for children, picture books, etc.
- Hotel accommodation below Rs.1000
Apart from all the services and goods mentioned above, the GST rate for loans and advances and stock market trading is 18%. GST rates on real estates in the affordable (within Rs.45 lakh) and non-affordable segments are 1% and 5% respectively.