A Brief Snapshot of the GST Rates
The Goods and Services (GST) Council so constituted, convened on May 18, 2017 to discuss and finalize GST rates for approximately 1200 goods spread across in almost 100 categories. Additionally, on May 19, 2017, the GST Council met to settle on the rates on services spread across 36 categories. According to the Revenue Minister Mr. Hasmukh Adhia, there are two GST rate slabs – one 18% and lower and the other 28% and higher. Almost 81% of the items so finalized under the GST fall under the first slab and the remaining 19% are to be taxed under the second bracket. For example 28% and above includes luxury items such as cars, electronic appliances, cigarettes and tobacco items; 18% includes FMCG goods etc.
We have provided a brief snapshot of the categorization of goods and services with respect to the rate slabs as follows:
|
Category |
Item |
| Exempted Goods | Poultry products such as meat, fish, chicken, eggs; dairy products such as milk, butter, curd, unpacked paneer ; fresh fruits and vegetables; food items like pulses, rice, flour, bread etc.; cosmetics and accessories such bindis, sindoor, vermillion; stationery including stamps, judicial papers, newspapers; handloom items and contraceptives |
| Exempted Services | Hotels not exceeding INR 1,000; educational services and healthcare |
| GST 5% on Goods | Dairy products such as skimmed milk powder, condensed milk, cream etc.; frozen vegetables; food items such as sugar, spices, edible oil, pizza bread, rusk, sweets, fish fillets, tapioca; beverages such as tea, coffee and juices; fuel including kerosene, LPG and coal; common utilities such as brooms; medical items including medicines and stents; newsprints and lifeboats |
| GST 5% on Services | Railway services; airplane service in economy; taxi services and aggregators such as Uber, Ola etc. |
| GST 12% on Goods | Dairy products such as cheese, butter and ghee; packed dry fruits; food items such as snacks, packaged chicken and sausages; beverages including fruit juices, packaged coconut water; personal hygiene products such as tooth powder, stationery including coloring and picture books; common utilities such as sewing machines and umbrellas; ayurvedic medicine, incense sticks and cellphones. |
| GST 12% on Services | Non-air conditioned hotel and restaurant services; airplane services in business class; services based on work contracts |
| GST 18% on Goods | Dairy products such as ice cream; preserved vegetables; food items such as refined sugar, pasta, cornflakes, jams, sauces, soups, instant packaged foods, processed foods, confectionery items like pastries and cakes; mineral water; personal hygiene products such as tissues, toilet paper, hair oil, soaps and toothpaste; stationery items such as note books, envelopes and fountain pens; electronics such as printed circuits, speakers and monitors, cameras, iron and steel products |
| GST 18% on Services | Air conditioned hotel and restaurant services serving liquor; telecommunication services; information technology services; financial services |
| GST 28% on Goods | Food items such as Chocolates, Chewing Gum, Custard Powder; aerated water; personal hygiene products includingDeodorants, Shaving Cream, After Shave, Hair Shampoo, Dye, Sunscreen, Perfume, Face Creams, Detergents; common utility or white goods such as Vacuum Cleaner, Shavers, Hair Clippers, Washing Machines, Dish Washers, Water Heaters & other Home Appliances; automobiles and motor vehicles; housing material such as paints, wallpaper, tiles, cement, ceramic etc.; weighing machines, vending machines, automated teller machines, fireworks, luxury or demerit goods such as pan masala, tobacco, aerated drinks, automobiles and motor vehicles. (it is pertinent to note that luxury items and demerit goods will attract a compensatory cess in addition to the 28% GST. The proceeds of this cess will be added to the compensation fund. This fund will be used to bridge tax revenue gaps for states, arising in the first five years of GST implementation.) |
| GST 28% on Services | 5-star hotel rooms and restaurant services; betting on race courses; movie tickets and cinemas |
We have provided a brief snapshot of the items that will attract the compensatory cess as follows:
| Item Description | GST Rate | Cess Range | Cess Limit |
| Coal | 5% | INR 400 per tonne | INR 400 per tonne |
| Pan Masala | 28% | 60% | 135% |
| Tobacco | 28% | 61% – 204% | INR 4170 / thousand |
| Aerated Drinks | 28% | 12% | 15% |
| Motor Vehicles | 28% | 1% – 15%(Please note that for cars exceeding 1500 cc engine capacity and any sports and luxury cars, the cess will be 15%; smaller cars will attract 1%) | 15% |
There are several goods for which rates are yet to be decided. These include Biri wrapper leaves (Tendu Patta) and Biris, Biscuits, Textiles, Footwear, Jewellery Items including natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, imitation jewellery and coins, power driven machines and machinery and capital assets for the purpose of industrial and agricultural use.
