GST Rates in India

GST Rates
GST REGISTRATION

The GST rate slabs are decided by the GST Council. The GST Council revises the rate slab of goods and services periodically. The GST rates are usually high for luxury supplies and low for essential needs. In India GST rate for various goods and services is divided into four slabs: they are 5% GST, 12% GST, 18% GST, & 28% GST.

The GST rates for various products have been revised several times by the GST council since the inception of the Goods and Services Tax (GST). The latest rate revision was brought into effect in the 41st GST Council Meeting which was held on Aug 27, 2020. Before that, there have been many GST Council Meetings in which certain rate revisions were introduced.

The details in respect to these rate revisions and other major things are being discussed below:

Revision of GST Rates announced in the 44th GST Council Meeting

GST rates on Covid-related essentials

Covid-related essentials  Present GST rate Revised GST rate  
Pulse oximeters12%5%
Hand sanitisers18%5%
Equipment to check body temperature18%5%
Furnaces for cremation and their installation18%5%
Ambulances28%12%

GST rates on Covid medicines and tasting kits

Covid-related medicines and testing kitsPresent GST rate Revised GST rate  
Testing kits12%5%
Specified inflammatory diagnostic kits12%5%

GST rates on oxygen and oxygen-related medical devices

Oxygen and oxygen-related medical devicesPresent GST rate Revised GST rate  
Medical grade oxygen12%5%
Oxygen concentrator or generator12%5%
Ventilators12%5%
Mak, canula, or helmet12%5%
BiPAP machine12%5%
High flow nasal canula device12%5%

GST rates on Covid-related drugs

Covid-related drugsPresent GST rate Revised GST rate  
Tocilizumab5%NIL
Amphotericin B5%NIL
Heparin and other anti-coagulants12%5%
Remdesevir12%5%
Any other drugs recommended by ministry of healthNA5%

GST Rates

Revision of GST Rates announced in the 43rd GST Council Meeting

  • GST on the export of relief goods to be exempted and will stay in effect until 31 August 2021.
  • GST on import of medicine for black fungus, that is Amphotericin B is also placed under the exemption list.
  • Any Covid-related relief item if imported even with the intention of donating to the government or any relief organization will be exempted from IGST till 31 August 2021.
  • Amnesty Scheme was announced by the finance minister to reduce late fee returns. Small taxpayers can file returns under this scheme.
  • A group of ministers will be formed who will submit a report by 8 June 2021 to determine whether the rates are to be increased or decreased.

Revision of GST Rates announced in the 42nd GST Council Meeting

Highlights of the meeting held on 5 October 2020

  • Small taxpayers with turnover of less than Rs.5 crore can now file quarterly GSTR-3B and GSTR-1 where the due date for GSTR-1 will be the 13th day of the month succeeding the quarter. This new rule came into effect on 1 January 2021. Due to the implementation of this rule, the number of returns has reduced to 8 from 24.
  • The quarterly taxpayers have the option of paying 35% of the net tax liability of the previous quarter, using an auto-generated challan for the first two months of the quarter.
  • For the auto-generation of GSTR-3B, a roadmap is prepared, where the details of the supplier’s GSTR-1 will help in auto-populating the ITC. GSTR-1 will help in auto-populating the tax liability as well. Hence, it is important to mandatorily file GSTR-1 before filing GSTR-3B. This rule came into effect on 1 April 2021.
  • Taxpayers will pay their GST through a simple challan.
  • Taxpayers with a turnover of Rs.5 crore and above will have to mention a 6-digit HSN code. A 4-digit HSN code is to be mentioned by taxpayers with a turnover of less than Rs.5 crore. This rule came into effect on 1 April 2021.
  • Bank accounts which have their PAN linked with Aadhaar will be able to receive refunds.
  • ISRO, Antrix Corporation, and New Space India Limite (NSIL) will receive GST exemptions to encourage the space launching services in India.
  • Sanitisers that are non-alcoholic will be continued to be taxed at 18% GST.
  • The compensation cess collected till date amounts to Rs.20,000 crore. This amount was disbursed to specific states in India by 5 October 2020.
  • Rs.25,000 crore towards IGST 2017-18 was distributed to specific Indian states.

Highlights of the meeting held on 12 October 2020

  • The meeting ended with no unanimity on the issue of borrowing. The states may avail of the options previously provided to borrow funds.
  • The compensation cess will be levied will beyond the 5-year tenure.
  • The center cannot borrow in case of shortage of compensation cess fund as it will create an increase in the yield of G-sec bonds.
  • A borrowing calendar has been issued where if the borrowing goes beyond the sanctioned limit, the G-Sec deals used as a benchmark for every other borrowing will increase.
  • Cess collected from July 2022 will not be disbursed to states in India and will be used for the payment of principal and interest. This will help in exempting the state from the burden of repaying the borrowed amount.

Revision of GST Rates announced in the 41st GST Council Meeting

The 41st GST Council meeting was chaired by the Union Finance Minister Nirmala Sitharaman and was held on 27 August 2020. The government will provide an additional 0.5% relaxation in states where the borrowing limit is under the FRBM Act. States can borrow more due to the injury that has been caused by the coronavirus outbreak. Two options have been provided to the states to meet the compensation cess shortfall.

Revision of GST Rates announced in the 40th GST Council Meeting

The 40th GST Council meeting was chaired by the Union Finance Minister Nirmala Sitharaman and was held on 12 June 2020. As per the meeting, no late fee will be levied for taxpayers that come under nil tax liability. In case taxpayers file the returns between 1 July 2020 and 30 September 2020, the maximum late fee that can be charged is Rs.500. In the case of small taxpayers (aggregate turnover of up to Rs.5 crore), the rate of interest has been reduced to 9% from 18% p.a. for GST returns that are filed for February, March, and April 2020. However, the returns must be filed before 30 September 2020.

Revision of GST Rates announced in the 39th GST Council Meeting

The following table reflects the changes in the rates applicable to the goods and services:

Goods or commoditiesNew rateOld rate
Handmade matches12%5%
Mobile phones18%12%
Other handmade matches12%18%
Aircraft MRO services5% along with full ITC18%

Announced on 14 March 2020, the rates mentioned above are applicable w.e.f. 1 April 2020.

Revision of GST Rates announced in the 38th GST Council Meeting

The following table reflects the changes in the rates applicable to the goods and services:

Goods or commoditiesNew rateOld rate
Sacks of polythene and polypropylene18%12%
State owned lotteries28%12%
State authorised lotteries28%28%
Woven and non-woven fabrics18%12%

Announced on 18 December 2019, the rates mentioned above are applicable w.e.f. 1 January 2020. Rates for the lotteries are applicable w.e.f. 1 March 2020.

Revision of GST Rates announced in the 37th GST Council Meeting

Announced on September 20th, 2019, the following table reflects the changes introduced in the rates applicable to the goods and services. These changes are applicable w.e.f. from 1 October 2019.

Goods or commoditiesNew rateOld rate
Plates and cups made of tree productsNil5%
Caffeinated Beverages28% + 12% cess18%
Supplies of Railways wagons & coaches (without the refund of accumulated ITC)12%5%
Outdoor Catering (without the ITC)5%18%
Diamond Job work1.50%5%
Other Job work12%18%
Hotels with Room Tariff of Rs.7501 and above18%28%
Hotels with Room Tariff from Rs 1,001 to Rs 7,50012%18%
Woven or non-woven Polyethylene Packaging bags12%18%
Marine fuel5%18%
Almond Milk18%
Slide fasteners12%18%
Wet grinders (consisting of stone as a grinder)5%12%
Dried TamarindNil5%
Semi-precious stones- cut & polished0.25%3%
Specified goods for petroleum operation under Hydrocarbon Exploration Licensing Policy5%Applicable rate
Cess on Petrol Motor Vehicles (Capacity of 10-13 passengers)15%1%
Cess on Diesel Motor Vehicles (Capacity of 10-13 passengers)15%3%

Revision of GST Rates announced in the 36th GST Council Meeting

The following table reflects the changes in the rates applicable to the goods and services:

Goods or commoditiesNew rateOld rate
Electric chargers5%18%
Electric vehicles5%12%

These rates were revised on July 27th, 2019 and is applicable w.e.f. August 1st, 2019.

Revision of GST Rates announced in the 31st GST Council Meeting

The following table reflects the changes in the rates applicable to the goods and services:

Goods or commoditiesNew rateOld rate
Vegetables which are preserved provisionally but are not suitable for immediate consumption5%Nil
Cooked or uncooked vegetables which are steamed, frozen or boiled (branded)5%Nil
Music Books12%Nil
Parts for manufacturing renewable energy devices falling under chapter 84, 85 or 94 of Tariff5%
Natural cork12%5%
Fly ash blocks12%5%
Walking sticks12%5%
Marble rubble18%5%
Agglomerated cork18%12%
Cork roughly squared or debugged18%12%
Articles of Natural cork18%12%
Movie Tickets worth Rs.100 or less18%12%
Premium on Third party insurance on Vehicles18%12%
Accessories for Handicapped Mobility Vehicles28%5%
Power banks28%18%
Movie Tickets worth more than Rs.10028%18%
Video game consoles, equipments used for Billiards and Snooker and other sport related items of HSN code 950428%18%
Retreated & used pneumatic Rubber Tyres28%18%
Colour Television Sets & monitors up to “32 Inches”28%18%
Digital & Video Camera recorders28%18%
Pulleys, transmission shafts, cranks and gear boxes under HSN 848328%18%
Reduction of tax rates on Air travel of pilgrims28%18%

Commodities and Services GST rates

The GST Council has proposed a four-tier tax structure wherein rates are either nil or very low so far as essential food items are concerned. The reason for this is that these food items constitute around 50% of the consumer basket, and contributes significantly towards ensuring that widespread inflation is kept in check even after the revised tax slabs under GST have been implemented. Negative items and luxury goods, however, are expected to be taxed at a considerably higher rate to maintain revenue neutrality for state and central governments following the implementation of the new GST rates. Other precious metals are likely to see the implementation of an extra concessional GST tax slab as these metals are currently taxed at just 1% under VAT.

Following is a table of commodities and services and the GST rates applicable to them:

Commodities / ServicesGST Rate
Items that are not listed in any other category, such as electrical appliances, oil, soaps, etc.18%
All services like professional charges, fees, insurance, banking, restaurants, telecom, etc.18%
Essential farm produced mass consumption items such as wheat, rice, food grains, etc.NIL
Mass consumption and common use food items like mustard oil, tea, spices, etc., but not including processed foods5%
Processed foods12%
Cars and white goods28%
De-merits and luxury goods and items that fall under the sin category, such as aerated drinks, tobacco, luxury cars, pan masala, etc.28% + CESS

GST Council implements rate cuts leaving 35 goods in the highest tax bracket

By July 2018, the GST Council reduced tax rates on 191 goods, leaving only 35 items in the 28% tax category. Some of these include:

  • AC
  • Dishwashing machines
  • Digital cameras
  • Cement
  • Video recorders
  • Parts of automobiles
  • Motor vehicles
  • Tyres
  • Yachts
  • Aircrafts
  • Aerated drinks
  • Sin items such as tobacco, cigarette, and pan masala

At the time of GST rollout, there were 226 goods in the highest tax slab. Over a period of 1 year, the GST Council has slashed the taxation rates for 191 items in total. The highest tax slab may be further rationalised to ensure that only sin goods and super luxury goods are taxed at 28%.

FAQs on GST rates

  1. What is the GST rate for gold?

The GST on gold is 3% of its value. However, if the gold is converted into ornaments, an additional 5% GST is charged on the making charges. Thus, a total of 8% GST is charged on gold ornaments.

  1. What is the GST rate charged on mobile phones?

At present, the GST charged on mobile phones is 12%.

  1. What is the GST rate charged on two-wheelers?

At present, the GST charged on two-wheelers is 28%, which is the highest slab for GST. However, there have been petitions to reduce the GST on two-wheelers to 18%.

  1. What is the GST rate charged on television sets?

At present, the GST charged on television sets is 18% for TVs of up to 32 inches. For TVs that are bigger than 32 inches, the GST charged is 28%.

  1. What is the GST rate for lac?

The GST rate for lac is 3%.

  1. What is the GST rate for coffee?

The GST rate for coffee is 28%.

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