GST LLP - A quick guide to India GST rates in 2017

GST Legacy

A quick guide to India GST rates in 2017

India’s biggest tax reform, the Goods and Services Tax (GST) rolled out on July 1st 2017. The tax rates have been finalized for 1,211 items with a majority of items being kept under the 18% slab. There are seven tax slabs, namely nil, 0.25%, 3%, 5%, 12%, 18% and 28% under the GST with an additional cess on sin and luxury items.

It can be quite difficult to keep a track of what tax rate which item will be levied with as there are so many items in the tax list with multiple tax slabs. So here’s a breakdown of the important items in various tax slabs.

No tax will be levied on items like bangles, besan, bindi, bread, buttermilk, bones and horn cores, bone grist, bone meal etc., hoof meal, horn meal, cereal grains hulled, Palmyra jaggery, chicken, curd, drawing books, eggs, fish, flour, Kajal, Prasad, salt, sindoor, stamps, judicial papers, printed books, newspapers, fresh fruits and vegetables, fresh meat, handloom, Jute, milk, natural honey, and hotels and lodges with tariff below INR 1,000.

Rough Diamonds will be taxed at the rate of 0.25%. Finance Minister Arun Jaitley has said that this enables in keeping an audit trail.

Gold will be taxed at the rate of 3%, which is lower than the lowest slab of 5% under the new GST regime and is closer to the current tax incidence of about 2%.

Items such as bio gas, branded paneer, cashew nut, cashew nut in shell, coal, coffee, cream, fish fillet, frozen vegetables, ice and snow, insulin, kerosene, lifeboats, medicines, packaged food items, pizza bread, postage or revenue stamps, raisin, skimmed milk powder, stamp-post marks, tea, spices, rusk, sabudana, stent, apparel below Rs 1,000, footwear below Rs 500, transport services (railways and air transport), and small restaurants will be under the 5% category.

All diagnostic kits and reagents, ayurvedic medicines, agarbatti, animal fat, bhutia, cake servers, carom board and other board games like ludo, cell phones, chess board, colouring books, apparel above Rs 1,000, business class air ticket, butter, cell phones, cheese, dry fruits in packaged form, exercise books and note books, fertilisers, forks, fish knives, fruit juices, frozen meat products, ghee, ketchup and sauces, ladles, playing cards, sausage, skimmers, spectacles, spoons, state-run lotteries, namkeen, tooth powder, picture books, umbrella, sewing machine, tongs, non-AC hotels, and work contracts will fall under 12% GST tax slab.

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AC hotels that serve liquor, aluminum foil, bamboo furniture, bidi patta, biscuits (all categories), branded garments, camera, CCTV, cornflakes, curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasonings, electrical transformer, envelopes, footwear costing more than Rs 500, flavoured refined sugar, goodwill, head gear and parts thereof, Kajal pencil sticks, optical fiber, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, swimming pools and padding pools, ice cream, instant food mixes, mineral water, tissues, tampons, note books, steel products, trademarks, printed circuits, restaurants inside five-star hotels, room tariffs between Rs 2,500 and Rs 7,500, software, speakers and monitors, weighing machinery [other than electric or electronic weighing machinery], telecom services, IT services, and financial services will attract 18% tax under GST.

Five-star hotels, aerated water, after shave, alcohol, aircraft for personal use, ATM, automobiles, bidis, chewing gum, cigarettes, cigars, cinema, chocolate not containing cocoa, ceramic tiles, deodorants, dishwasher, dye, hair clippers, hair shampoo, hotels, hotels with room tariff above Rs 7,500, molasses, motorcycles, pan masala, paint, private-run lotteries authorized by the states, race club betting, shavers, shaving creams, sunscreen, vacuum cleaner, vending machines, waffles and wafers coated with chocolate, wallpaper, washing machine, water heater, and weighing machine will attract tax 28% tax slab under GST.

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