The Goods and Services Tax (GST) regime is on track to be implemented in India with effect from July 1, 2017, after a long and arduous journey of about 13 long years when it was first discussed in Kelkar Task Force’s report on indirect taxes.
On May 18, 2017, on the first day of the 2-day GST council meet held at Srinagar, J & K, the GST rates for 98 categories were announced. A total of 1,211 items were categorised under the four tax slabs of 5%, 12%, 18% and 28%.
This includes zero-rated goods and services as well as exempt items wherein either suppliers cannot claim their input VAT or are not registered for VAT, and additional cess for sin / demerit items such as cigarettes, alcohol, etc.
On this crucial day, all nine GST rules pertaining to registration, composition, valuation, input tax credit, invoice, transition, payment, refund, and return were approved.
Major highlights of the 18th May announcements include:
- Exemption on healthcare and education to continue;
- A large number of items including a major chunk of the FMCG kept under the 18% tax slab;
- Transportation services to be taxed at 5%, from the existing 15%;
- Work contract at 12% tax with full input tax credit.
At the subsequent GST Council meeting on June 3, a new slab of 3% was added to the four slabs already declared to accommodate gold and silver.
Update: Revised GST rates for certain goods, as per discussions in the GST Council Meeting held on June 11.
Listed below are all the GST rates that specific items would attract based on the decisions taken at the meetings held in May and June.
|1a.||No Tax Goods||Food grains, jaggery, fresh fruits, vegetables, meat, fish, eggs, milk, butter-milk, curd, natural honey, flour, besan, bread, prasad, salt, bindi, sindoor, stamps, judicial papers, printed books, newspapers, bangles, and handloom. Bones and horn cores, bone grist, bone meal, etc.; hoof meal, horn meal, cereal grains hulled, palmyra jaggery, Dicalcium phosphate (DCP) of animal feed grade, human hair, dressed, thinned, bleached or otherwise worked, and muddhas made of sarkanda and phool bahari jhadoo.|
|1b.||No Tax Service||Sleeper, metro tickets, seasonal passes, hotels & lodges with tariff less than Rs.1000, grandfathering service, education, and healthcare.|
|2.||3%||Gold and silver.|
|3.||0.25%||Rough precious and semi-precious stones.|
|4a.||5% Goods||Live animals (except horse), edible oil, sugar, fish fillet, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee (except instant), tea, spices, pizza bread, rusk, sabudana, kerosene, coal, life-saving drugs, stent, indian sweets, lifeboats, footwear below Rs.500/-, all natural fibres including cotton yarn, cotton and readymade garments costing below Rs.1,000/- , all fabrics irrespective of fibres, packaged food, and all categories of agricultural equipment and solar panels under a registered Trademark. Cashew nut, cashew nut in shell, raisin, ice and snow, insulin, agarbatti, kites, coir mats, matting and floor covering, Pawan Chakki that is Air Based Atta Chakki, Numismatic coins, braille paper, braille typewriters, braille watches, hearing aids and other appliances to compensate for a defect or disability.|
|4b.||5% Services||Transport services including railway (other than sleeper), railway freight, air transport (economy), services of goods transport agency, selling of space for advertisement in print media, small restaurants (turnover < 50 lakhs), cab aggregators, and tour operator services.|
|5a.||12% Goods||Live horse, frozen meat products, butter, cheese, ghee, packaged dry fruits, animal fats, sausage, fruit juices, namkeen, computers, ayurvedic medicines, fertilisers, tooth powder, incense sticks, colouring books, picture books, umbrella, sewing machine, cellphones, and readymade garments costing above Rs.1,000/-. Preparations of vegetables, fruits, nuts or other parts of plants, including pickle, murabba, chutney, jam, jelly. Ketchup & sauces, bari made of pulses including mungodi, menthol and menthol crystals, peppermint (Mentha Oil), fractionated / de-terpenated mentha oil (DTMO), de-mentholised oil (DMO), spearmint oil, mentha piperita oil, all diagnostic kits and reagents, plastic beads, exercise books and note books, fly ash blocks, glasses for corrective spectacles and flint buttons, spoons, forks, ladles, skimmers, cake servers, fish knives, tongs, fixed speed diesel engines, two-way radio (Walkie talkie) used by defence, police and paramilitary forces, etc. Intraocular lens, spectacles, corrective, playing cards, chess board, carom board and other board games, like ludo, etc. [other than video game consoles and machines]|
|5b.||12% Services||Hotels with tariff Rs.1000/- to Rs.2499/-, ac hotels, air tickets (business class), work contract, transport of goods in containers by rail by any persons other than Indian Railways, and construction of complex/building/civil structure intended for sale.|
|6a.||18% Goods||Flavoured refined sugar, pasta, cornflakes, pastries, cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, mineral water, tissues, envelops, tampons, hair oils, soaps, toothpaste, note books, steel products, printed circuits, camera, speakers, monitors, LPG stoves, electronic toys, capital goods, chemicals, industrial use intermediaries, biscuits, footwear above RS.500/-, synthetic fibres and synthetic yarn, and Tendu leaves. Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasonings, kajal pencil sticks, plastic tarpaulin, school satchels and bags other than of leather or composition leather, toilet cases, hand bags and shopping bags of artificial plastic material of cotton, jute, vanity bags, and handbags of other materials excluding wicker work or basket work. Headgear and parts thereof, pre cast concrete pipes, salt glazed stone ware pipes, aluminium foil, rear tractor tyres and rear tractor tyre tubes, rear tractor wheel rim, tractor centre housing, tractor housing transmission, tractor support front axle. Weighing Machinery [other than electric or electronic weighing machinery], Printers [other than multifunction printers], ball bearing, roller bearings parts and related accessories, transformers industrial electronics, electrical transformer, static convertors (UPS), recorder, CCTV, set top box for TV, computer monitors not exceeding 17 inches, electrical filaments or discharge lamps, winding wires, coaxial cables, optical fiber, perforating or stapling machines (staplers), pencil sharpening machines, baby carriages,Instruments for measuring length, for use in the hand (for example, measuring rods and tapes, micrometers, callipers), bamboo furniture, swimming pools and padding pools.|
|6b.||18% Services||AC hotels with liquor license, hotel with tariff Rs.2,500/- to Rs.4,999/-, telecom, IT, finance, branded garments, flat maintenance charges > Rs.5,000/-, outdoor catering, admission tickets to circus, drama, Indian classical dance and theatrical performance.|
|7a.||28% Goods||Cigarettes, molasses, chewing gum, chocolate (without cocoa), wafers & waffles (chocolate coated), pan masala, aerated drinks, paints, deodorants, perfumes, shaving cream, after shave, shampoo, dye, sunscreen, wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, TV, ac, refrigerator, microwave ovens, washing machine, vending machine, ATM, vacuum cleaner, shavers, hair clippers, motorcycles, *automobiles, personal aircraft, and beedis (no cess).|
|7b.||28% Services||5-star or above rated hotels, accommodation costing > Rs.5000/-, race clubs, casinos, cinema, amusement park, theme park, water park and sporting events.|
Small cars – Diesel = 28% + 5% cess.*
Small cars – Petrol = 28% + 1% cess.
Luxury cars = 28% + 15% cess.