GST Tax Rates And Their Applicability

As GST is flooding the Indian markets from 1st of July , 2017 , there are lots of controversies about the applicability of tax rates on different products and implementing the rates on respective products right away from 1st , July, 2017 , here is the first copy of the written rates from . GST rates are given below product wise . Make your minds and software accordingly so that you can deliver the goods and services correctly to customer and avoid any penalties.


GST rates on Goods

Commodities GST RATE
Essential farm produced mass consumption items like milk, cereals, fruits, vegetable, jaggery (gur), food grains, rice and wheat NIL
Common use and mass consumption food items such as spices, tea, coffee, sugar, vegetable/ mustard oil; newsprint, coal and Indian sweets NIL
Silk and jute fibre NIL
Gold, Silver and Processed Diamonds 3%
Railway freight 5%
Pharma (Life saving drugs) 5%
Footwear up to Rs. 500 5%
Cotton and natural fibre 5%
Packaged foods like pickles, tomato sauce, mustard sauce and fruit preserves 12%
Ayurvedic and homeopathy medicines 12%
Processed foods 12%
Fruit juices, live animals, meats, butter & cheese 12%
Mobile phones 12%
Readymade garments 12%
Computer printers 18%
Footwear above Rs. 500 18%
All FMCG goods like hair oil, soaps, toothpaste and shampoos; chemical and industrial use intermediaries 18%
LPG stoves, military weapons, electronic toys 18%
Pastries, cakes, pasta, ice creams, soups 18%
Man made fibre and yarn 18%
White and brown goods like TV, refrigerator, AC, washing machines, microwave ovens; soft drinks and aerated beverages 28%
Cement 28%
Perfumes, revolver, pistols 28%
Chocolates, chewing gum, waffles containing chocolate 28%
Luxury and de-merits goods and sin category items e.g. tobacco, pan masala 28% + cess
Small cars – petrol driven 28% + 1% cess
Small cars – diesel driven 28% + 5% cess
Cigarettes 28% + 5% cess
Luxury cars 28% + 15% cess
Heavy bikes, Luxury yachts, private jets 31%

GST rates for Services

Services GST RATE
Sleeper, metro tickets and seasonal passes NIL
Outsourcing (in industries such as gems and jewellery, textiles) 5%
Railways (AC) 5%
Restaurants with annual turnover less than Rs. 50 lakhs 5%
Cab aggregators like Ola, Uber 5%
Hotels with tariff Rs. 1,000 – 2,500 12%
Non-AC restaurants without liquor license 12%
Real estate (Work contracts) 12%
State run lotteries 12%
Airlines (Business class) 18%
Telecom, financial service 18%
Hotel room tariff Rs. 2,500 – 7,500 18%
Hotel room tariff above Rs.7,500 28%
AC restaurants with liquor license 18%
Movie tickets below Rs. 100 18%
Movie tickets above Rs. 100 28%
5 star hotels 28%
State authorized lotteries 28%

A four tier GST tax structure as above has been proposed by the GST Council. Keeping zero or very low rates for essential food items which makes up the half of the consumer basket will ensure that there is no widespread inflation due to implementation of revised tax slabs under GST. At the same time, luxury goods and negative items would be taxed at a significantly higher rate so as to ensure revenue neutrality for central and state governments once the new GST tax rates are implemented.
An additional concessional GST tax slab is likely to be implemented for gold and other precious metals that currently attract only 1% VAT.

The proposed GST rates are likely to ease burden on common man as the rates are lower than existing tax on most mass consumption items. Finance Minister Mr. Arun Jaitley has expressed confidence that GST will not be inflationary.

Leave a Reply

Your email address will not be published. Required fields are marked *