Bringing uniformity in the taxation system of the country has been the foremost objective behind the introduction of GST. Prior to GST, there were uncountable types of taxes that were levied on goods and services, and the tax rates varied from state to state, to add to the misery of an already confused populace. The GST Council, with its One Nation One Tax vision, has eliminated the cascading of taxes and brought all the goods and services across the country under one tax regime – GST. The Council holds meetings at regular intervals to talk over the progress made and possible areas of improvement, and to revise the GST rates for various products and services.
The 28thGST Council meeting was held on 21st of July, 2018, in New Delhi, and slashed the existing GST rates on a large number of goods that were earlier in the 28% GST bracket. Let us now understand the various GST rate slabs and the good/services under those.
There are four GST tax slabs as per the GST online portal: 5%, 12%, 18%, and 28%, comprising most of the goods and services, while a few items and services are exempt from being taxed.
Products/Services with No GST:
The GST Council brought an end to a year-long hue and cry over the imposition of taxes on sanitary napkins by bringing it under the No GST bracket, a pretty welcome move! In addition, hulled cereals, salts, breads, fruits, vegetables, newspapers, and many more items were exempted from GST. All hotels and lodges carrying a tariff of below INR 1000 are exempted from being taxed under GST.
5% Tax Slab:
Goods: The goods attracting a tax of 5% under GST include coffee, frozen vegetables, pizza breads, cashew nuts, ethanol, insulin, biogas, agarbattis (incense sticks), etc.
Services: Tour operators/services, print media ad spaces, standalone AC and non-AC restaurants serving liquor, air transport, etc. are some of the services that fall under the 5% GST rate slab.
12% Tax Slab:
Goods: The items that will attract a 12% GST include frozen meat products, pickles, ghee, fruit juices, tooth powder, medicines, corrective spectacles, plastic beads, menthol, board games, etc.
Services: Air travel excluding economy class, IP rights on temporary basis, renting of accommodation costing between INR 1000-2500 per day and a few more services will be charged at 12% VAT.
18% Tax Slab:
Goods: Most of the items falling under the impact of GST are under the 18% tax slab. A few goods in this category are chocolates, mirrors, wrist watches, light fittings, musical instruments, refrigerators, cookers, washing powders, aluminium foils, bamboo furniture, etc.
Services: Food/drinks at restaurants that have AC/heating systems or liquor licence, outdoor catering, renting of accommodation costing INR 2500-5000 per day, restaurants located inside hotels with room tariffs of INR 7500 or above, and a few more services are liable to be taxed at 18% under GST.
28% Tax Slab:
Goods: After a number of meetings and amendments, the GST Council has only left 35 products in the 28% GST bracket. The items include automobiles, paint, cement, tobacco, cigarettes, sunscreen, aerated water, etc.
Services: Accommodation in five-star hotels with room tariff of more than INR 7500 per day, food/drinks in five-star hotels, betting on racing and casinos, movie tickets, go-karting, sporting events, theme parks, etc., will fall under the 28% GST rate slab.
It should be noted that the GST rates on various products keep changing as the need arises and staying updated with the latest tax slab is necessary. There is no GST calculator as such that may help you calculate the GST to be charged on a certain product. But there sure are GSPs to help you with these aspects. Vayana GSP is one of the GSPs (GST Suvidha Providers) recognized by the Government of India to facilitate the process of GST registrations and filings, and making businesses GST-compliant with its cloud-based GST filing software SahiGST. In case you have any queries related to GST, or need any assistance in this regard, feel free to contact us.