GST Rates slab in India

GST or Goods and Services Tax is levied on all goods and services sold in India. The GST rate is the particular percentage of tax charged on the item. In India, the GST rates are divided into five slabs; 0%, 5%, 12%, 18%, 28%.

GST rates and other provisions related to it are decided by the GST Council, which comprises 33 members, including Finance Ministers of the state. The Council meeting is headed by the Union Finance Minister. The GST rate of a particular product usually depends on its per day per unit transaction value.

0% GST

Goods like bread, salt, eggs, flour, sanitary napkins, handlooms, and newspapers, honey, etc. don’t have any GST levied on them.

Services like hotels with tariffs below Rs.1000 and savings account charges are some services that do not have any GST on them.

GST Slab of 5%

The goods of basic amenities are included, such as sugar, oil, spices, coffee, coal, fertilizers, and medicinal drugs are covered.

The services included in this tax slab are railways, airways, takeaway food, AC and Non-AC restaurants, hotel rooms with a tariff less than Rs. 7,500, and special flights for pilgrims.

GST Slab of 12%

Products like cell phones, sewing machine, umbrella, jewelry box, along with processed foods like frozen meat, fruit juices, butter, cheese, ghee are covered.

The services under this slab include business class flight tickets and movie tickets below Rs. 100.

GST Slab of 18%

Under these slab products like hair oil, pasta, pastries, ice-cream, mineral water, hair shampoo, oil powder, water heaters, washing machine, detergent, scent sprays, leather clothing, cookers, oil powder and games are covered.

The services under this slab include restaurants within hotels whose tariffs are above Rs. 7,500, actual hotel bill below Rs. 7,500, movie tickets above Rs. 100.

GST Slab of 28%

Under this slab, products like cars, cigarettes, durable consumer products, high-end motorcycles, pan masala, weighing machine, cement are covered.

The services include racing, betting in casinos, the actual bill of hotel stay above Rs. 7,500. An additional 0.25% rate is levied on semi-polished and cut stones.

GST on Loans & Advances

Pre-GST service tax was levied at the rate of 15%. Now, GST on loans is 18%. However, even after the 3% increase in the EMI was unaffected because GST is not levied on a loan payment or interest payment. GST on loans and advances is levied on processing charges and all other charges paid to banks apart from loan repayment and interest payment.

Since GST is levied only on charges, its impact on principal repayment and interest payment is negligible. The rate of GST is 18 % on popular loans like Personal Loan, Home Loan, Business Loan, etc.

GST on Cars

The rate of GST on cars is fixed at a rate of 28%. An additional composition cess is also applicable. Thus, the effective rate of GST will range from 29% to 50%. For cars driven by environment-friendly fuels like fuel cells and electricity have lower GST rates.

GST on Gold

The current rate of GST on gold items such as gold jewelry is 3%. Although 5% of GST is applicable to making charges of gold jewelry when the manufacturing of the jewelry is outsourced to a job worker. In the final bill to the customer, only 3% of GST is applied.

GST on Real Estate

GST is levied only when an under-construction property is purchased. From 1 April 2019, GST is applicable at the rate of 1% for affordable house properties and 5% for non-affordable house properties. The GST rates vary between 5% to 28% (for cement) for various building materials used for construction. However, no GST is levied when you purchase a ready to move in property.

GST on Food

GST of 5% to 18% is levied on packaged food, processed and semi-processed foods. No GST is levied on fresh food. Some products like chocolates, baked products, cakes are included in the 18% slab.

GST on Hotels

For hotels with charges less than Rs. 1000, GST is not applicable. For hotels charging between Rs. 1000 and Rs. 7500 the applicable rate is 12%. For charges above Rs. 7500, the applicable rate is 18%.

GST on Sanitisation and Safety products related to COVID-19

In view of the recent rise in demand for products like masks and sanitizers, the government was requested to change or reduce the GST on the aforementioned necessities, but the change was not carried out. The current GST rates on these products are:

Surgical masks - 5%

Hand sanitizer - 18%

Hand wash - 18%

Blood strip tests - 12%

GST on Clothing

Clothing items with a retail cost less than Rs.1000 are levied with 5% GST, while items with cost more than Rs.1000 attract a GST of 12%

GST on Labour charges

The GST rate for labour charges has been applied to an 18% tax rate. GST will be paid on the basis of reverse charge

GST on Insurance

The GST levied on the different kinds of insurance differs with the premium of the insurance. Most common insurance policies like life and general insurance are levied with an 18% GST rate.

GST on Petrol

Pure GST is not applied to petrol as the government believed that it would lead to revenue loss. The petrol prices across the country vary due to the difference in taxes levied on it by each state.

GST on plane fare

Economy class ticket fare is fixed at 5% but the GST on business class tickets ranges between 9% to 12%.

Getting registered as a new business or existing unregistered business selling goods or services is essential. The registration can be done on an GST online portal.

The process of registration is quick, easy, user-friendly, and hassle-free. Visit the site, fill out the forms, and submit the required documents. A representative will contact you after verification of the documents and explain the procedure and help you. After completing the payment of a GST registration fee, you will receive the GSTIN for your business within 1-3 business days.