The enforcement of the Goods and Services Tax in India has led to a revolutionary unified tax structure. The GST applies to various categories of products and services. However, there are different rates of GST which apply to a variety of products and services. In India, there is a GST Council that determines the GST rate slabs that are applied. The rate slabs for Goods and Services are reviewed by the GST council from time to time. Generally, the GST rates are high for the luxury category of products and the GST rates are low for the necessary products.
In India, the GST rates that are applied to various Goods and Services are divided into four rate slabs that include 5% GST, 12% GST, 18% GST, and 28% GST. After the introduction of the GST in India, these GST rates are revised several times by the GST council on various products and services.
The GST rate means the percentage rates of the tax which is imposed on the sale of a variety of goods and services. Any individual or business which is registered under the GST law must issue their invoices along with the GST amounts that are charged on the value of the supply.
Talking about the CGST and SGST (For intra-state transactions), the GST rates are moreover the same. Notably, the GST rate in IGST (For inter-state transactions) is approx. the sum of the CGST and SGST rates.
It is important to note that different GST rate slabs are applied to goods and services depending on their nature and category. Presently, the GST rate slabs are such as 0% (nil-rated), 5%, 12%, 18% & 28%. Apart from this, a composition-taxable person shall pay the GST at low rates like 1.5% or 5%, or 6% on their turnover. Also, there are TDS and TCS under GST, with rates of 2% and 1% respectively.
The GST rate structure in India is a very simplified one and is explained in a very elaborate way to the GST-registered taxpayers. Apart from this, the GST rates must be multiplied by the calculable value of the supply to get the GST amounts in a tax invoice. The GST law in India also levies cess to the above GST rates on the sale of products such as aerated water, petrol, cigarettes, tobacco, andmotor vehicles.
Several goods and services in India fall under the GST rate slabs, which makes it more important for a taxpayer to know which category of product or service fall under which rate slab. Now, let us briefly understand what are the products and services which fall under the GST rate slabs such as 0% (nil-rated), 5%, 12%, 18% & 28%.
Apart from these, some other items will get costlier such as:
For example : Let us say Mr. Akash buys a Wagon-R for Rs.6.5 lakh from a dealer. Then, the GST and cess are calculated as follows:
Sale price: Rs.6,50,000 (value of supply)
GST rate at 18% (comes under the category of small cars)
GST cess at 1%
Total value: Rs.6,50,000 + Rs.1,23,500 = Rs.7,73,500
The GST rates in India are well categorized under different slabs and are revised from time to time by the Government of India. While buying certain products or services, the consumer is also paying for the GST rates under which that product or service falls. Learn more about the GST rate structure in India and make a wise choice while purchasing any product or service from the market.