GST Rate: Guide - May 2024
GST Rate: Guide - May 2024
The Goods and Services Tax (GST) was introduced in India in 2017 to simplify the tax system. It replaced many central and state taxes to make things easier and boost the economy. This guide will explain the current GST rates in India as of May 2024.
GST Rate Slabs: A Tiered System for Different Needs
The GST Council sets the rates for GST on goods and services. They regularly check and adjust these rates to make sure they bring in enough money while still being fair for consumers.
A detailed breakdown of the current GST rate structure:
- 0% (Nil Rated): Essential items like:
o Milk, fresh vegetables, eggs, curd, kajal (kohl)
o Educational and sanitation services are exempt from GST, ensuring their affordability.
- 5% GST: This rate applies to a wide range of commonly consumed goods, including:
o Sugar, tea, coffee beans (roasted), spices, and unpackaged food grains like rice and wheat.
o Packaged paneer, edible oils, raisin, domestic LPG cylinders, skimmed milk powder, and cashew nuts.
o Unbranded natural honey, footwear below Rs. 500, milk food for babies, and apparels below Rs. 1,000.
o Fabric, coir mats, agarbatti (incense sticks), and unbranded atta (wheat flour) and maida (refined wheat flour).
o Besan (gram flour), prasad (religious offerings), palmyra jaggery, phool bhari jhadoo (flower mop).
- 12% GST: This slab covers a wider variety of goods compared to 5%:
o Butter, ghee, processed food items like biscuits and chips, and almonds.
o Mobiles, fruit juices, preparations of vegetables, nuts, fruits, or other parts of plants.
o Packed coconut water, umbrellas, and life-saving drugs (excluding those under 5%).
o Coffee (except instant coffee) and coal.
o Items under Chapter 86 of the HSN code related to railways (previously 12% but increased to 18% in August 2020).
18% GST is charged on non-essential items that are usually seen as optional purchases.
o Ice-cream, pasta, toothpaste, industrial intermediaries, soap, and toiletries.
o Corn flakes, soups, computers, printers, and capital goods.
o Pens and metal concentrates and ores (previously 12% but increased to 18% in August 2020).
o In the past, media reproduction, print, broadcasting, sound recordings, and licensing services were taxed at 12%. However, in August 2020, the tax rate increased to 18%.
o Packing containers and boxes, scrap and polyurethanes (previously 5% but increased to 18% in August 2020).
o Certain renewable energy devices (previously 5% but increased to 12% in August 2020).
o Printed material (previously 12% but increased to 18% in August 2020).
- 28% GST applies to luxury items and "sin goods" with harmful health effects, attracting the highest tax rate. This category includes:
o Small cars (with an additional cess of 1% or 3% depending on engine capacity and size).
o High-end motorcycles (with an additional cess of 15%).
o Consumer durables like air conditioners and refrigerators.
o Beedis (Indian cigarettes made of unprocessed tobacco leaves, traditionally wrapped in tendu or sal leaves). It's important to note that beedis are not included in the 28% slab itself.
o Luxury and "sin" items like BMW cars, cigarettes, and aerated drinks (with an additional cess of 15%).
Additional Considerations: Changes, Composition Scheme, and Special Rates
Beyond the basic slabs, the GST framework caters to different types of taxpayers:
- Keytruda, a cancer medication, now has a lower GST rate of 5% starting in August 2020, down from 12%.·
Increased Rates in August 2020: Some goods saw a rise in GST rates from 12% to 18% in August 2020. These include railway goods and parts, pens
The GST rate in India is important for businesses and consumers. It helps businesses follow tax rules and set prices.
Consumers can easily see the taxes on their purchases and make smart choices. The GST Council is checking the tax system to make sure it helps the economy grow and keeps essential goods affordable.