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GST Tax Rates In India Research Team | Posted On Monday, October 15,2018, 04:42 PM

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GST Tax Rates In India



Goods and Services Tax also called GST is an indirect tax for the whole of India. It’s the biggest tax reform since Independence. It is a comprehensive; destination based multi-stage tax which is levied only on value addition. GST replaces Central Excise Duty, Service Tax, State VAT, Purchase Tax, Additional Excise Duty, Additional Duties of Excise (Textile and Textile Products), Central Sales Tax, Entertainment Tax, Special Countervailing Duty, Countervailing Duty, Octroi, Luxury tax among others.

The seeds of GST were sown in the year 2000, when the then Prime Minister Atal Bihari Vajpayee formed a committee for the review of GST which was under the chairmanship of the then Finance Minister, Asim Dasgupta of West Bengal. GST was first introduced in 2006 by the then Union Finance Minister in 2006-2007. He said it would be introduced on 1st April 2010. Finance Minister P Chidambaram had announced in his speech that GST will be implemented from April 2011. On June 2017, the Finance Minister Arun Jaitley announced that GST would be introduced on the midnight of June 30th 2017.

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GST Tax rates In India

The GST Bill was passed on 3rd August 2016 in the Rajya Sabha. The amended bill was passed on 8th August 2016 in the Lok Sabha. The bill was then ratified by the States after being accepted by the then President Pranab Mukherjee on 8th September 2016. It was then notified in the Gazette of India. The GST law came into force on 1st July 2017.

Calculation of tax under GST

Take a look at the components of GST. CGST is collected by the Central Government on all intra-state sales. An example would be a transaction within Karnataka. You also have SGST collected by the State Government on intra-state sales. Then you have the IGST collected by the Central Government for inter-state sales.

GST Calculator India

There are plenty of free online GST calculators. These calculators help calculate the cost of the product or service after GST is applied. There are 5 GST slab rates in India. They are 0%, 5%, 12%, 18% and 28%.

  • You have to fill in the original price of goods and services in the GST tax calculator slot.
  • You then select Add GST.
  • After this select the GST rate.
  • You press calculate to get the final cost of the product.

GST amount = (Original cost of the product * GST%) /100

Net Price = Original Cost + GST Amount.

Original cost of the product = Rs 1,00,000.

GST = 12%.

GST amount = (100000 *12) /100 = Rs 12,000.

Net Price = 100000 + 12000 = Rs 1,12,000.

SEE ALSO: Professional Tax in India

How to register GST?

  • Visit the Government GST Portal and check the registration Tab.
  • You then fill the PAN, Mobile Number, Email ID and the name of the State in Part A of the GST REG-01.
  • You get a temporary reference number on the mobile and also via email after you complete the OTP verification.
  • You then have to fill Part B of the GST REG-01. This must be signed by the DSC or the EVC. You then upload the required documents according to the business type. You also get an acknowledgment in Form GST REG-02.
  • If information is sought or you get intimation via Form GST REG-03, you would have to visit the department and produce documents within 7 working days in Form GST REG-04.
  • The tax office could reject the application if they find errors and you are informed via Form GST REG-05.
  • You are given a certification of registration after verification and approval through Form GST REG-06.

GST rates in India

There are 5 GST laws in India. They are 0%, 5%, 12%, 18% and 28%. Some items are exempted from GST which include meat, fish, poultry, cereals, dairy, eggs, vegetables, natural honey, salt, besan, bindi, judicial papers, newspapers, horn meal, coloring and drawing books among others.

Some items in the 5% GST slab:

  • Agarbatti
  • Braille paper
  • Apparels up to Rs 1,000.
  • Cashew nuts
  • Coir mats
  • Domestic LPG
  • Edible oils
  • Fertilizers
  • Fish fillet
  • Insulin
  • Milk food for babies
  • Packaged food items
  • Postage stamps
  • Pizza bread
  • Rusk
  • Spices
  • Skimmed milk
  • Stent
  • Sugar
  • Tea

You also have some services under the 5% GST slab like air travel in the economy class, airlines and railway transport services and radio transport by radio taxis and motor cabs.

See also: GST advantages and disadvantages

Some items in the 12% GST slab:

  • Almonds
  • Carrom board
  • Bhujia
  • Butter
  • Chess Board
  • Fisk knives
  • Diagnostic kits
  • Exercise books
  • Fruits
  • Fruit juice
  • Ghee
  • Jelly
  • Jam
  • Nuts
  • Notebooks
  • Packaged dry fruits and packaged coconut water.
  • Mobiles

Some items in the 18% GST slab:

  • Bamboo
  • Cakes
  • Camera
  • CCTV
  • Aluminium Foil
  • Corn flakes
  • Refined sugar
  • Footwear priced above Rs 500
  • Hair oil
  • Ice cream
  • Instant food mixes
  • Mayonnaise
  • Monitors
  • Optical fibers
  • Toothpastes

You also have services like AC hotels serving alcohol, guest houses and hotels with room tariff from Rs 2,500 to Rs 5,000 a night. IT and telecom services also fall under this slab.

Some items in the 28% GST slab:

  • Aerated water
  • Ceramic tiles
  • After shave
  • Bidis
  • Automobiles and motorcycles
  • Dye
  • Pan masala
  • Shaving creams
  • Pan masala
  • Vending machines
  • Washing machine
  • Water heater
  • Weighing machine ATM
  • Shavers
  • Hair clippers

There are some services under the 28% GST slab. They are gambling, cinema, 5-star hotels and guest houses with room tariff of Rs 5,000 and above.

GST revised rates 2018

The GST Council meeting was held on the 21st July 2018. These items were brought down from the 28% GST slab to the 18% GST slab.

28% to 18% GST slab:

These include lithium-ion batteries used in electric vehicles, concrete mixers, crane lorries, fire fighting vehicles, trailers, semi trailers and work trucks used for goods transportations in factories, warehouses and dock areas, cosmetic pads, powder puffs, toilet sprays, scent sprays, paints, varnish, grafting putty, resin cements, washing machines, vacuum cleaners, television sets up to 68 cms, refrigerators, ice cream freezers, milk coolers, mixers, food grinders, juicers, shavers, hair clippers, hair dryer, hand dryer, electric smoothing irons among others.

18% to 12% GST slab:

These items were brought down from the 18% GST slab to the 12% GST slab. You have brass kerosene stoves, hand bags, purses, bamboo flooring, jewelry boxes, wood frames, art ware of cork, stone art ware, ornamental framed mirrors, glass statues, glass art ware, art ware of copper, brass, aluminum, silver and nickel and handcrafted lamps among others.

12% to 5% GST slab:

These items were brought down from the 12% GST slab to the 5% GST slab. These include Toran, handmade braids, phosphoric acid, hand woven tapestries, handmade lace, and handmade carpets among others.

18% and 12% to 0% GST slab:

These items were brought down from the 18% and 12% GST slab to the 0% GST slab. These include sabai rope, sanitary napkins, sal leaves and solid biofuel pellets.

5% to 0% GST slab:

These items were brought down from the 5% GST slab to the 0% GST slab. These include coir pith compost, khali dona, siali leaves, phool bhari jhadoo, stone/marble/wood deities.

Benefits of GST:

  • Life gets simple with 17 indirect taxes replaced by GST.
  • Input tax credit encourages suppliers to pay tax.
  • Tax evasion reduces.
  • Logistics and inventory costs fall as truck movement gets easy at state boundaries.
  • Exports get a boost.
  • Investment in capital goods sector gets boosted.
  • Less developed states get a boost.
  • Make in India takes off.
  • Manufactured goods get cheaper.
  • GDP of India rises.

See Also: Input Tax Credit Under GST

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