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GST Rates for Different Goods and Services in India

GST Rates for Goods and Services

GST Rates for Different Goods and Services in India

Understanding GST rates is crucial for entrepreneurs as they can impact the pricing of goods and services. The GST Council of India regularly updates these rates, influencing the cost of various items and services in the country. In this article, we will explore the current GST rates for common goods and services you may use. IndiaFilings offers a powerful tool for accessing the latest GST rates, HSN codes, and SAC codes for over 20,000 goods and services.

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Goods and Services Tax

GST, or Goods and Services Tax, is an indirect tax imposed on the supply of goods and services. Introduced on July 1, 2017, GST replaced multiple indirect taxes in India, simplifying the taxation system. Enacted by the Central Government in the Budget Session of 2017 and approved by Parliament on March 29, 2017, GST consolidated various taxes like Central Excise Duty, VAT, and Entry Tax.

This comprehensive tax applies to the manufacturing, selling, and consuming of goods and services nationwide. Small and large organisations must obtain a GST Identification Number to register under the GST policy. For intra-state sales, Central GST and State GST are levied, while Integrated GST is charged for inter-state transactions.

GST Rates in India 

In India, GST rates denote the percentage of tax applied to various goods and services supplied within the country. The current GST framework in India comprises four distinct types of GST:

  • State Goods and Services Tax (SGST): SGST is levied by individual states and union territories on transactions within their respective jurisdictions. The SGST rate is consistent across the state or union territory.
  • Central Goods and Services Tax (CGST): CGST is imposed by the Central Government on intra-state transactions. Like SGST, CGST has a uniform rate throughout the country.
  • Integrated Goods and Services Tax (IGST): IGST applies to transactions that involve the movement of goods and services between states or union territories. It is calculated as the sum of CGST and SGST or UTGST. IGST ensures a seamless tax mechanism for inter-state transactions.
  • Union Territory Goods and Services Tax (UTGST): UTGST is analogous to SGST but is applicable in union territories. Unlike SGST and CGST, UTGST has a consistent rate within the union territory.

In summary, GST rates in India encompass these four components, each designed to govern specific types of transactions and ensure a standardized tax structure throughout the country.

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 Also read CGST vs SGST – Difference Between CGST & SGST.

The Significance of Goods and Services Tax (GST) Rates

In India, the Goods and Services Tax (GST) has streamlined a variety of indirect taxes, applying a uniform GST rate nationwide. Several key advantages underscore the importance of having consistent GST rates across India:

  • Elimination of Tax-on-Tax: GST’s single-tax structure eliminates the complexities of tax-on-tax, potentially reducing the overall cost of goods and services for consumers.
  • Simplified Compliance: With GST, various indirect taxes have been consolidated into a single tax, making compliance easier for businesses and individuals.
  • Increased Tax Collection: GST has the potential to generate higher tax revenue, contributing to the growth and strengthening of the country’s economy.
  • Combating Tax Fraud and Corruption: The unified GST system helps reduce the risks of tax fraud and corruption by promoting transparency and accountability.
  • Encouraging Small Businesses: GST encourages unorganized and small businesses to adhere to tax regulations set by the Indian government, fostering a more organized business environment.

Overall, GST’s advantages benefit both traders and service providers.

Revised: GST Rates for Goods in India

In India, goods are subject to various GST rates, categorized as follows: 0% (nil rated), 5%, 12%, 18%, and 28%, representing the most common rates. Additionally, lesser-used GST rates of 0.25% and 3% are applied to certain goods. The GST composition scheme features slightly reduced GST tax rates of 1.5%, 5%, or 6%. Still, it’s important to note that these rates are based on the turnover generated by the GST-registered entity, not the specific goods supplied.

Common Nil Rated or 0% GST Products in India

Common Nil Rated or 0% GST Products in India In India, several everyday essentials enjoy a nil rate or 0% GST, ensuring these essential goods remain affordable. Here are some common examples of products with a 0% GST rate:

  • Fresh Milk and Pasteurized Milk
  • Rice (not labelled or pre-packaged)
  • Fresh Meat (not pre-packaged) and Eggs
  • Fresh Curd and Paneer (not pre-packaged)
  • Fresh Fruits and Vegetables
  • Natural Honey (not branded/pre-packaged)

These exemptions aim to make essential items more accessible to the general public.

Examples of Goods in India with 5% GST Rate In India, several everyday goods fall under the 5% GST rate. Here are some examples:

  • Sugar and Tea
  • Milk food items for babies
  • Indian sweets
  • Hearing aids
  • Radio/App-based Taxis
  • Economy-class flight and Railway tickets

These goods are subject to a 5% GST rate, making them more affordable for consumers.

Common Goods with a 12% GST Rate in India

Several everyday items in India are subject to a 12% GST rate. Here are some examples:

  • Computers and Mobile phones
  • Packaged Ghee
  • Business class flight tickets
  • Fruit juices or Fruit Pulp-based drinks
  • Preserved Fruits and Vegetables
  • Condensed Milk

These goods fall under the 12% GST rate category, impacting consumer pricing.

Examples of Goods and Services with an 18%

GST Rate Several goods and services in India are subject to an 18% GST rate. Here are some examples:

  • Mineral Water (natural or artificial)
  • Pasta
  • Life Insurance and Health Insurance
  • Cornflakes
  • Toothpaste
  • Computer Monitors

These products and services fall under the 18% GST rate category, affecting consumer pricing.

Goods in India with the Highest 28% GST Rate

Several luxury and premium goods in India are subject to the highest GST rate of 28%. In addition to this rate, Compensation cess may apply to certain items such as cigarettes and passenger cars. Here are examples of goods that fall under the highest GST rate category:

  • Caffeinated Beverages
  • Cigars and Cigarettes (tobacco-based)
  • Pan Masala
  • Passenger Cars
  • Portland/Slag/Aluminous Cement
  • Air Conditioners
  • Dish Washing Machines

Please note that the list above provides illustrative examples of goods subject to the highest GST rate and is not exhaustive.

GST Rates for Services

The GST council has introduced a 4-tier tax structure for services, just like for goods. These service GST rates are 5%, 12%, 18%, and 28%, each with its implications for consumers. Notably, healthcare and educational services are exempt from GST. Here’s a breakdown:

  • 5% for services like rail travel and tour operators
  • 12% for services, including rail freight and non-economy air travel
  • 18% for services like restaurants with alcohol and event tickets
  • 28% for services like amusement parks

This structure simplifies tax calculations for businesses and consumers. Additionally, GST rates for consultancy, professional, courier, education, and IT services are standardized for clarity.

How to Calculate GST Rates?

Calculating Goods and Services Tax (GST) in India is essential for businesses to ensure compliance and accurate tax payments. GST rates apply to the selling price of goods or services, ultimately determining consumers’ pay. Here’s how you can calculate GST:

  • Monthly GST Returns: Businesses are required to file GST returns monthly and pay the calculated GST charges to the government. When calculating GST, it’s crucial to consider various aspects, including exempted supplies, eligible and ineligible Input Tax Credit (ITC), and inter-state sales.
  • Avoiding Interest Charges: Accurate calculation of GST rates is vital to avoid penalties. Underpayment of GST can result in an 18% interest rate on the shortfall, so it’s essential to calculate GST correctly.
  • Online GST Calculator: To simplify the process, you can use an online GST calculator to estimate your GST liability. These calculators allow you to input parameters such as the current ledger balance, return filing month, tax liability, etc.
  • Timely Payment: Timely payment of GST is crucial to avoid legal actions. Businesses that comply with GST regulations benefit from avoiding financial losses and penalties.

GST Calculation Formula

Goods and Services Tax amount = (Original price x Current GST rate) / 100

Determine the net price = GST amount + Original price of the product/ service

Suppose a product or a service costs Rs. 1000, and the GST applicable is 12%; then your net product price will be 100+(1000 X (12/100)) = 1120.

Using this formula, you can easily determine the GST tax amount for various transactions and ensure accurate tax compliance.

GST calculator

A GST calculator is a convenient online tool that helps users calculate the Goods and Services Tax (GST) payable for a specific period, whether a month or a quarter. It is a valuable resource for a wide range of users, including buyers, manufacturers, distributors, and businesses, to determine their GST liabilities accurately.

Explore the Latest GST Rates for Goods and Services with IndiaFilings

IndiaFilings provides valuable assistance in staying up-to-date with the latest GST rates for a wide range of goods and services. Easily access information about GST tax rates, HSN codes, and SAC codes for over 20 thousand products and services. The GST applicable to goods and services is determined based on their respective HSN or SAC codes. IndiaFilings ensures you have accurate and current information at your fingertips to facilitate smooth compliance. 

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