GST Rates

On the 18th of May, 2017, the GST council convened to fix and finalise the much awaited GST rates for 1211 goods across 98 categories. The very next day, the council re-convened to finalise the GST rates for 36 categories for services.

To begin with, Hasmukh Adhia, Revenue Secretary, Ministry of Finance, Government of India has stated – that nearly 81% of the items will be classified at 18% GST rate slab and lower; while the remaining 19% will be taxed at 28% and above.

Here’s what you need to know about some of the main goods and services, classified across the 5 GST tax slabs.

Exempted from GST

Goods
  • Poultry Products – Fresh Meat, Fish, Chicken, Eggs
  • Dairy Products – Milk, Curd, Butter Milk, Jaggery (Gur), Lassi, unpacked Paneer
  • Fresh Fruits & Vegetables
  • Food Items – Natural Honey, Flour (Atta & Maida), Pulses, Basmati Rice, Gram Flour (Besan), Bread, Vegetable Oil, Religious Sweets (Prasad), Common Salt
  • Cosmetics & Accessories – Bindi, Vermillion (Sindoor), Bangles
  • Stationery – Stamps, Judicial Papers, Printed Books, Newspapers
  • Handloom Products
  • Contraceptives
Services
  • Hotel Services priced at less than INR 1000
  • Education (exemption continued from before)
  • Healthcare (exemption continued from before)

GST at 5%

Goods
  • Dairy Products – Skimmed Milk Powder, Milk food for babies, Condensed milk, Packaged Paneer, Cream
  • Frozen Vegetables
  • Food Items – Sugar, Spices, Edible Oil, Pizza Bread, Rusk, Sweets, Fish Fillets, Tapioca (sabu daana)
  • Beverages – Coffee, Tea, Juices
  • Fuel – Kerosene, LPG, Coal
  • Common Utilities – Broom
  • Medical Goods – Medicines, Stents
  • Newsprint
  • Lifeboats
Services
  • Railway Travel
  • Economy Class Air Travel
  • Cab Aggregators (e.g. Uber & Ola)

GST at 12%

Goods
  • Dairy Products – Butter, Cheese, Ghee
  • Packaged Dry Fruits
  • Food Items – Snacks (Namkeen & Bhujia), Packaged Chicken, Sausages
  • Beverages – Fruit Juices, Packed Coconut Water
  • Personal Hygiene – Tooth Powder
  • Stationery – Colouring Books, Picture Books
  • Common Utilities – Sewing Machine, Umbrella
  • Ayurvedic Medicine
  • Incense Sticks (Agarbatti)
  • Mobile Phones
Services
  • Non-AC Hotels & Restaurants
  • Business Class Air Travel
  • Work Contracts

GST at 18%

Goods
  • Dairy Products – Ice Cream
  • Preserved Vegetables
  • Food Items – Flavoured refined sugar, Pasta, Corn Flakes, Pastries, Cakes, Jams, Sauces, Soups, Instant Food Mixes, Processed Foods, Edible Oil
  • Beverages – Mineral Water
  • Personal Hygiene – Tissues, Toilet Paper, Hair Oil, Soap Bars, Toothpaste
  • Stationery – Note Books, Envelopes, Fountain Pens
  • Electronic Equipment – Printed Circuits, Speakers, Monitors
  • Camera
  • Iron & Steel Products
Services
  • AC Hotels & Restaurants that serve liquor
  • Telecom Services
  • IT Services
  • Financial Services

GST at 28%

Goods
  • Food Items – Chocolates, Chewing Gum, Custard Powder
  • Beverages – Aerated Water
  • Personal Hygiene – Deodorants, Shaving Cream, After Shave, Hair Shampoo, Dye, Sunscreen, Perfume, Face Creams, Detergents
  • White Goods – Vacuum Cleaner, Shavers, Hair Clippers, Washing Machines, Dish Washers, Water Heaters & other Home Appliances
  • Automobiles & Motor Vehicles*
  • Housing Materials – Paint, Wallpaper, Ceramic Tiles, Cement
  • Weighing Machines, Vending Machines, ATM
  • Fireworks
  • Luxury / Demerit Goods* – Pan Masala, Tobacco, Aerated Drinks & Motor Vehicles
Services
  • Rooms and Restaurants in 5-star hotels
  • Race course betting
  • Cinema etc.

*Note – Luxury / Demerit Goods as listed above will also attract a compensation cess over and above the GST rate of 28%

Treatment of Luxury / Demerit Goods

In addition to the rates which have been fixed for major categories of goods and services, the GST council has approved the compensation rates for 5 luxury / demerit items. The proceeds of this cess will go into the compensation fund which would be used to bridge any tax revenue gap for states in the first five years of GST.

The items that will be levied with the compensation cess, over and above the GST rates which are applicable on them are as follows:

Items GST Rate Applicable Approved Cess Range Cess Ceiling
Coal 5% INR 400 / tonne INR 400 / tonne
Pan Masala 28% 60% 135%
Tobacco 28% 61% – 204% INR 4170 / thousand
Aerated Drinks 28% 12% 15%
Motor Vehicles** 28% 1% – 15% 15%

**Note – The cess will be 15% for cars with over 1500 cc engine capacity, other sports and luxury cars. The cess will be 1% for smaller cars.

Yet to be decided

For the following goods, the GST rates are yet to be decided –

  • Biri wrapper leaves (Tendu Patta) & Biris
  • Biscuits
  • Textiles
  • Footwear
  • Jewellery Items -Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, imitation jewellery and coins
  • Power Driven Machines & Machinery for industrial and agricultural uses

Please follow links below to visit CBEC website and access complete schedule of GST rates.

Schedule of GST rates for Goods | Schedule of GST rates for Services

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