You may already have a fair idea about the introduction and implementation of the Goods and Service Tax (GST) and its effect on taxing and tax calculation. Before GST’s implementation, customers would face double taxation on the goods and services they purchased at various stages, courtesy of indirect taxes such as Sales, Service, Entertainment, VAT, and so forth.
However, the Goods and Services Tax has managed to nullify the cascading effect of the taxes mentioned earlier. GST is a unified, comprehensive tax on the supply of taxable goods and services from the vendor or business to the consumer.
Are you supposed to pay GST?
You will have to make a GST payment online if you are a business owner, and your yearly turnover crosses Rs. 40 Lakh. If your company is situated in a special category state like Himachal Pradesh, J&K, or one of the states in the North East, the turnover threshold to pay GST is Rs. 10 Lakh for goods and Rs. 20 Lakh if you are dealing with services.
Getting into GST rate slabs
There are five GST slabs that apply to taxable goods and services. According to the GST act, essential goods and services fall in the lowest tax bracket or GST slab. The give GST slabs are – 5%, 12%, 18%, and 28%. The GST council mentioned that over 1300 goods and 500 services are being taxed. Here is a GST rates item wise list explained below:
GST Rates list in India
As mentioned earlier, there is a GST rates list that ought to be aware of. This is how it works:
The goods that fall in the 5% bracket include fish filet, pizza bread, frozen vegetables, ethanol, vegetables, fertilizers, ayurvedic medicines, seasonings, oil, gas, woven carpets, and so forth.
The services that come in this category or tax bracket include standalone AC and non AC restaurants, relatively small eateries, public transportation eateries like the ones in airports and railway stations, and eateries that you find in hotels that have room rates of at least Rs. 7500 per room for a night.
The 12% bracket contains goods like pickles, ghee, mobile phones, fresh fruit beverages, sewing machines, reflective surfaces, canned foods, medicines, diesel fuel, butter, sausage rolls, pressure cookers, wooden frames, cheese, frozen meats, and so forth. This tax bracket also includes services like business class flight tickets and cinema tickets that are priced below Rs. 100
The goods that you will find in the 18% tax bracket include breakfast cereal, pumps, tubes, croissants, cleaning products, dried fruits, soups, sparkling water, torches, chocolate bars, lamp fittings, deodorants, beauty cases, oil powder, bubble gum, noodles, processed sugar, hair gel, bubble gum, after-shave products, and so on.
You will also find a plethora of consumer electronics in the 18% tax bracket. Such electronics are TV sets, refrigerators, vacuums, washing machines, hairdryers, curling irons, heating systems, and more. Aside from these, the 18% tax slab also applies to stationery, musical instruments, and physical training equipment.
The services that fall in the 18% category include restaurants in hotels that charge Rs. 7500 per night per room, cinema tickets that cost Rs. 100, financial services, and telecommunications.
The fifth GST rate slab is the 28% slab, that applies to goods such as pan masala, tobacco, air cleaners, airplanes, boats, sun protection, luxury vehicles, liquor, aerated beverages, and several other luxury commodities. The 28% tax slab also covers services like five-star hotels and resorts that charge Rs. 7500 per night for a room, lodges, cinema tickets over Rs. 200, and more.
These rates make up the GST tax rate list in India. Aside from this, there are certain goods and services exempt from the Goods and Services Tax. These goods and services are buttermilk, organic honey, croissants, cereal grains, jaggery, vegetables, milk, flour, salt,
fruits, meat, fish, eggs, chicken, postcards, printed and published books, sketchbooks, handicrafts, newspapers, and hotels and lodges that have rooms that cost Rs. 1000 or below