- As soon as the GST rates were announced a huge wave of curiosity hit across industry and trade bodies. Everyone is evaluating their position as a result of this change.
- So in this article, we bring you our analysis of these GST rates.
1. GST Rate revision in 28th GST council meeting
28th GST Council Meeting was held 21st July 2018. Rates for 45 Goods and 2 Services have been revised*. Click here to read all updates of the meet.
Recent Rate Changes on Goods
| GOODS | |||
| S.NO | Items | New Rate | Old rate |
| 1 | Rakhi (other than that of precious or semi-precious material ) |
Nil
|
18% |
| 2 | Sanitary Napkins | 12% | |
| 3 | Circulation and commemorative coins | 5% | |
| 4 | Raw material for broom | 12% | |
| 5 | Stone/Marble/Wood Deities | 5% | |
| 6 | Sal leaves and its products | 18% | |
| 7 | Khali dona | 18% | |
| 8 | Coir pith Compost | 5% | |
| 9 | Chenille fabrics and other fabrcis under 5801 |
5%
|
12%
|
| 10 | Handloom dari | ||
| 11 | Phosphoric Acid (fertilizer grade only) | ||
| 12 | Handmade Carpets, Textile Floor, Coverings | ||
| 13 | Knitted cap/topi having retails sale value exceeding Rs. 1000 | ||
| 14 | Kota Stones and Simliar Stones (other than polished) |
18%
|
|
| 15 | Ethanol for sale to oil marketing companies for blending with fuel | ||
| 16 | Solid Bio fuel pellets | ||
| 17 | Marine Engine | 28% | |
| 18 | Bamboo Flooring |
12%
|
18%
|
| 19 | Hand Operated Rubber Roller | ||
| 20 | Brass Kerosene Pressure Stove | ||
| 21 | Zip and Slide Fastener | ||
| 22 | Handicrafts (Excluding handmade) | ||
| 23 | Handbags including pouches and purses; jewellery box | ||
| 24 | Fuel Cell vehicle | 28% | |
| 25 | Televisions upto 68 cm |
18%
|
28%
|
| 26 | Glaziers’ putty, grafting putty, resin cements | ||
| 27 | Refrigerators, freezers, water cooler, milk coolers, ice cream freezer | ||
| 28 | Washing Machines | ||
| 29 | Food Grinders & mixer | ||
| 30 | Vacuum Cleaners | ||
| 31 | Paints and Varnishes (including enamels and lacquers) | ||
| 32 | Shavers, Hair Clippers | ||
| 33 | Hair Cleaners | ||
| 34 | Storage water heaters | ||
| 35 | Immersion heaters | ||
| 36 | Hair Dryers, Hand Dryers | ||
| 37 | Electric Smoothing irons | ||
| 38 | Scent Sprays | ||
| 39 | Toilet Sprays | ||
| 40 | Pads for application of cosmetics or toilet preparations | ||
| 41 | Lithium-ion batteries | ||
| 42 | Powder Puffs | ||
| 43 | Special purpose motor vehicles | ||
| 44 | Work Trucks (Self-propelled, not fitted with lifting or handling equipment) | ||
| 45 | Trailers & Semi trailers | ||
| List of Goods Exempt | ||
| Fortified Milk | exempt | 5% |
Recent Rate Changes on Services
|
SERVICES |
||
| Rate Change | ||
|
Services |
New Rates |
Old Rates |
| Supply of e-books |
5% |
18% |
| Supply of Multimodal Transportation |
12% |
Nil |
| List of Services Exempt | ||
| Senior Citizens | ||
| 1. Sevices provided by Coal Mines provident fund organisation to the PF subscribers | ||
| 2. Services provided by Old age home run by state government / central government to the citizens aged more than 60 years upto Rs. 25000 | ||
| 3. GST exempted on the administrative fee collected by National Pension System Trust | ||
| 4. Services provided by an unincorporated body or non profit entiy registered under any law to own members upto Rs. 1000 per year of membership fees. | ||
|
Agriculture/ Farmers |
||
| 1. Services by way of artificial insemination of livestock (other than horses) | ||
| 2. Services provided by FSSAI to food businesses. | ||
| 3. Services provided by way of warehousing minor forest produce | ||
| 4. Services provided by the installation and commissioning by DISCOMS for extending electricity distribution network for agricultural use. | ||
|
Banking/Finance/ Insurance |
||
| 1. Reinsurance services provided to insurance scheme such as Pradhan Mantri Rashtriya Swasthya Suraksha Mission | ||
|
Government |
||
| 1. Guarantees given by central/state government to their undertakings/PSUs. | ||
| 2. Services provided by government to ERCC by assigning the right to collect royalty to mining lease holders. | ||
|
Miscellaneous |
||
| 1. Import of services by Foreign diplomatic missions/UN other international organizations | ||
| 2. GST rate slabs will apply on the actual rate for hotel services instead of declared tariff. |
2. GST Rate revision in 25th GST council meeting
Latest Update:
As per 25th GST Council meeting on 18th January 2018
*Note that Rate changes, Exemptions and other proposals made shall be given effect once the Notifications are issued for the same.
GST council has made the much-awaited announcements around tax rates on various categories of goods on 18th January 2018 at Vigyan Bhavan, Delhi. There has been a hype around these rates for a while and now these rates are finally in the public domain!
Rates for 29 Goods and 53 Services have been revised*. Click here to read all updates of the meet.
- Goods taxed at 0%- Vibhuti, De-oiled rice bran and parts used to manufacture hearing aids
- Reduced from 28% to 18%- Old and used motor vehicles [medium and large cars and SUVs] without ITC, Public transport Buses that run on Biofuel, Services of joy rides, Go-karting
- Reduced from 28% to 12% –Old and used motor vehicles [other than medium and large cars and SUVs] without ITC
- Reduced from 18% to 12% –Drinking water packed in 20 litres bottles, Drip irrigation system, sprinklers, Biodiesel, Sugar boiled Confectionery, Services of construction of metro / mono-rail, mining of petrol crude
- Reduced from 18% to 5% –LPG for household use, Tamarind Kernel Powder, Mehendi paste in cones, Raw materials and Consumables needed for Launch vehicles/satellites, Services of Tailoring
- Reduced from 12% to 5%-Velvet fabric( Without Refund of ITC), Articles of straw, of esparto or of other plaiting materials
- Reduced from 3% to 0.25%-Diamonds and precious stones
- Rate Increased from 0% to 5%-Rice bran (other than de-oiled rice bran)
- Rate Increased from 12% to 18%-Cigarette filter rods
- Services included in the Exemption List:
- Providing information under RTI Act, 2005
- Legal services provided to Government
- Admission to, or conduct of examination provided to all educational institutions including any service of conducting entrance examinations on collection of entrance fees
Admission to, or conduct of examination provided to all educational institutions including any service of conducting entrance examinations on collection of entrance fees
3. GST Rate revision in 23rd GST council meeting
Latest Update:-
As per 23rd GST Council meeting on 10th November 2017
Rates for 178 items have been reduced from 28% to 18%. Click here to read all updates of the meet.
- GST Rate for manufacturers and traders under composition scheme is 1 %
- Reduced from 28% to 18% W.e.f. 15th Nov 2017 – Shampoo, Perfume, tiles, watches
- Reduced from 28% to 12% – Wet grinders, tanks
- Reduced from 18% to 12% – Condensed milk, refined sugar, diabetic food
- Reduced from 12% to 5% – Desiccated coconut, idli dosa batter, coir products
- Reduced from 5% to Nil – Duar meal, khandsari sugar, dried vegetables
- For Restaurants within hotels, and room tariff less than Rs. 7,500 the GST rate is 5%. Also, the credit of ITC paid on inward supplies cannot be taken.
- For Restaurants within hotels, and room tariff greater than Rs. 7,500 the GST rate is 18% and credit of ITC paid on inward supplies can be availed.
- Outdoor catering continues to be charged at 18% with the availability of ITC on inward supplies.
We already know that the GST slabs are pegged at 5%, 12%, 18% & 28%. According to the latest news from the GST council, the tax structure for common-use goods are as under:
GST Rates Structure
| Tax Rates | Products | |
|
0%
|
Milk | Kajal |
| Eggs | Educations Services | |
| Curd | Health Services | |
| Lassi | Children’s Drawing & Colouring Books | |
| Unpacked Foodgrains | Unbranded Atta | |
| Unpacked Paneer | Unbranded Maida | |
| Gur | Besan | |
| Unbranded Natural Honey | Prasad | |
| Fresh Vegetables | Palmyra Jaggery | |
| Salt | Phool Bhari Jhadoo | |
|
5%
|
Sugar | Packed Paneer |
| Tea | Coal | |
| Edible Oils | Raisin | |
| Domestic LPG | Roasted Coffee Beans | |
| PDS Kerosene | Skimmed Milk Powder | |
| Cashew Nuts | Footwear (< Rs.500) | |
| Milk Food for Babies | Apparels (< Rs.1000) | |
| Fabric | Coir Mats, Matting & Floor Covering | |
| Spices | Agarbatti | |
| Coal | Mishti/Mithai (Indian Sweets) | |
| Life-saving drugs | Coffee (except instant) | |
|
12%
|
Butter | Computers |
| Ghee | Processed food | |
| Almonds | Mobiles | |
| Fruit Juice | Preparations of Vegetables, Fruits, Nuts or other parts of Plants including Pickle Murabba, Chutney, Jam, Jelly |
|
| Packed Coconut Water | Umbrella | |
|
18%
|
Hair Oil | Capital goods |
| Toothpaste | Industrial Intermediaries | |
| Soap | Ice-cream | |
| Pasta | Toiletries | |
| Corn Flakes | Computers | |
| Soups | Printers | |
|
28%
|
Small cars (+1% or 3% cess) | High-end motorcycles (+15% cess) |
| Consumer durables such as AC and fridge | Beedis are NOT included here | |
| Luxury & sin items like BMWs, cigarettes and aerated drinks (+15% cess) |
||
In addition to the above, a few other items were mentioned in the Council’s announcement of rates. These items, and the applicable rates on them are as follows:
- Sugar, Tea, Coffee and Edible oil will fall under the 5 per cent slab, while cereals, milk will be part of the exempt list under GST. This is to ensure that basic goods are available at affordable prices. However, instant food has been kept outside this bracket so, no relief for Maggie lovers!
- The Council has set the rate for capital goods and industrial intermediate items at 18 per cent. This will positively impact domestic manufacturers as seamless input credit will be available for all capital goods. Indeed, it is time for “Make In India”.
- Coal to be taxed at 5 percent against current 11.69 percent. This will prove beneficial for the power sector and heavy industries which rely on coal supply. This will also help curb inflation. Expect a good run for Coal India tomorrow.
- Toothpaste, hair oil, and soaps will all be taxed at 18 percent, where currently they are taxed at 28 percent. Most of the cosmetics and fast moving consumer goods (FMCG) brands should get the benefit of this tax reduction. After all, Fair and Lovely might seem fairer in its pricing from now on!
- The ‘mithai’ from the neighbouring sweet shop might lose some of its flavor as Indian sweets will now be taxable at 5 per cent. If you have a sweet tooth, this could hurt your pocket a wee bit in the coming days.
Plus, it was announced that:
- for restaurants serving alcohol, the tax bracket will be 18 per cent
- education, healthcare are going to be exempted from GST
- services on Non-AC restaurants will be 12 per cent
If you want to know more about the GST rates & HSN codes, please check the below table.
4. GST Rates for goods and services with HSN
If you are using any version of Tally as accounting software, you can easily import all your sales and purchase data to ClearTax GST software and file your returns. Now you can integrate your Tally data and use ClearTax GST software for all GST compliance.
Further Reading
- What is GSTN?
- GSTR 2: Return Filing, Format, Eligibility and Rules
- GST Registration
- GST Calculator India
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