All about the GST rates in India

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.

What is the meaning of the GST rates ?

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.

Types of GST Rates in India :

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 :

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.

Goods and Services under different GST rate slabs: :

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%.

  • 0% (nil-rated) GST rate slab : Eggs, curd, Lassi, fresh vegetable salt, etc.
  • 5% GST rate slab : Sugar, tea, edible oil, domestic LPG, cashew nuts, and more.
  • 12% GST rate slab : Ghee, almonds, fruit juice, packed coconut water, etc.
  • 18% GST rate slab : Toothpaste, soap, pasta, cornflakes, soups, and more.
  • 28% GST rate slab : small cars, AC, fridges, motorcycles, and much more.

Apart from these, some other items will get costlier such as:

  • Services like mobile phone tariffs, tuition fees, salon visits, banking charges, and broadband services will get costlier by 3%. These are some of the services which used to fall under the 15% service tax and now they fall under the 18% slab rate.
  • Also, the taxes on tobacco, luxury goods, and aerated drinks now fall under the slab rate of 28% under the GST, making them costlier.
  • It is important to note that with all the changes in the GST rate slab structure, real estate will also get costlier.

Now, let us understand the GST rates with the help of an example:

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.

Frequently Asked Questions

  • Who revises the GST rates in India?
    The GST rates in India are revised by the Central government for various goods and services
  • What will happen if a wrong GST rate is charged over the product or service?
    There is no penalty charged under the GST act for charging the wrong GST rate on any product or service.
  • What is the GST rate on jewelry?
    The GST rate on jewelry is 3%.
  • Who decides the GST rates in India?
    The GST rates in India are decided by the GST council
  • What are the five main benefits of the GST?
    The five main benefits of the GST are:
    • Good revenue
    • Ease of compliance
    • Very easy and simple to understand.
    • Uniformity in tax structure
    • Great the economy
  • Are the GST rates higher for luxury cars?
    Yes, the GST rates are very high for luxury cars. Presently, luxury cars fall under the GST slab rate of 28%. This further includes an additional cess of 20 percent on sedans and 22 percent on SUVs.
  • What are the four GST slab rates in India?
    More than 1300 goods and 500 services have been put by the GST Council under the four GST tax slab rates of 5%, 12%, 18%, and 28%.