By 
After years of deliberation at the central level, the Goods and Services Tax (GST) was finally implemented in India on July 1, 2017. It is a multi-stage, indirect tax imposed on all goods and services transactions within the Indian territory.
The basic idea behind GST was to remove multiple taxations and bring all indirect taxes under one umbrella. It has, in effect, subsumed almost all indirect taxes such as VAT, excise, sales tax, etc.
It is worth noting that India is one of the few countries which implemented the dual GST regime, implying that both the central and state governments have stakes in the GST revenue.
Here’s everything you need to know about GST in general and GST rates in India, in particular.
GST rates in India: A brief overview
GST rates in India have been decided after much deliberation and revised time and again by the GST Council. However, first, it is crucial to understand how GST is imposed in the Indian context.
There are three categories that GST has been segregated into –
- Central GST or CGST
- State GST or SGST
- Integrated GST or IGST
Transactions made within a single state are levied with both CGST and SGST. For interstate transactions, IGST is levied. Every authorised business operating in India has to register for GST, and they are issued a GST identification number for all future transactions. It’s paramount that all businesses obtain their GSTIN as it will be required for all legitimate transactions. GST registration procedure is simple and doesn’t take much time. You can easily register for GST online.
It is also required to apply for a business loan from authorised financial institutions like Bajaj Finserv.
Bajaj Finserv offers such loans with minimum documentation and easy eligibility. They also bring you pre-approved offers, thereby making the application procedure straightforward and time-friendly.
Current tax slabs
Currently, there are 5 tax slabs under the GST regime- 0%, 5%, 12%, 18% and 28%. After years of deliberations, the GST Council has assigned these tax rates to over 500 services and 1300 goods. There are two notable exceptions to this tax structure- GST on gold is kept at 3% whereas semi-precious and precious stones attract a 0.25% GST.
A majority of goods and services fall below the 18% tax slab, 81% of them to be precise. The exact percentage of each tax slab is mentioned below.
- 7% of goods and services are exempt from any GST.
- 14% attract a GST rate of 5%.
- 17% of all taxable items come under the 12% slab.
- 43% of all goods and services attract a GST rate of 18%.
- 19% fall under the highest tax bracket, which is 28%.
Notable items under each tax slab
No tax
- Items of daily consumption such as milk, fruits, vegetables, fish, eggs, meat, cereals, flour, bread, salt, jaggery, etc.
- Essential cosmetic items like sindoor, kohl, bindi and bangles
- Newspapers, printed books, drawing books
- Hotels with daily tariff under Rs. 1000
5% tax slab
- Footwear below Rs. 500 and apparels under Rs. 1000.
- Premium food items like frozen paneer, skimmed milk, cashew nut, raisins, packaged food, etc.
- Medicines.
- Railway and flight tickets.
12% tax slab
- Food items such as frozen meat, dry fruits, ghee, sausage, butter, cheese, etc.
- Utility items like spoons, toothpaste, umbrella, spectacles, etc.
- Indoor games products like carrom board, chess board, ludo.
- Ayurvedic medicines.
- Business-class flight tickets.
- Clothing over Rs. 1000.
18% tax slab
- Mineral water, jams, cream, biscuits, pasta, cakes, etc.
- Electrical appliances like monitors, cameras, printers and speakers.
- Luxury hotels.
- IT services.
- Financial services.
28% tax slab
- Personal care accessories like shaving foam, deodorants, shampoo and sunscreen.
- Beedi.
- Appliances like washing machine, water heater, dishwasher, etc.
- Automobiles and motorcycles
GST, as a tax regime, is still in its nascent stages and there will be multiple revisions to the GST rates in India. There are both advantages and disadvantages of GST, but it’s definitely a step in the right direction for the Indian economy.
