On the 18th of May, 2017, the GST council convened to fix and finalise the much awaited GST rates for 1211 goods across 98 categories. The very next day, the council re-convened to finalise the GST rates for 36 categories for services.
To begin with, Hasmukh Adhia, Revenue Secretary, Ministry of Finance, Government of India has stated – that nearly 81% of the items will be classified at 18% GST rate slab and lower; while the remaining 19% will be taxed at 28% and above.
Here’s what you need to know about some of the main goods and services, classified across the 5 GST tax slabs.
Exempted from GST
Goods
Poultry Products – Fresh Meat, Fish, Chicken, Eggs
Dairy Products – Milk, Curd, Butter Milk, Jaggery (Gur), Lassi, unpacked Paneer
Fresh Fruits & Vegetables
Food Items – Natural Honey, Flour (Atta & Maida), Pulses, Basmati Rice, Gram Flour (Besan), Bread, Vegetable Oil, Religious Sweets (Prasad), Common Salt
Cosmetics & Accessories – Bindi, Vermillion (Sindoor), Bangles
Stationery – Stamps, Judicial Papers, Printed Books, Newspapers
Handloom Products
Contraceptives
Services
Hotel Services priced at less than INR 1000
Education (exemption continued from before)
Healthcare (exemption continued from before)
GST at 5%
Goods
Dairy Products – Skimmed Milk Powder, Milk food for babies, Condensed milk, Packaged Paneer, Cream
Frozen Vegetables
Food Items – Sugar, Spices, Edible Oil, Pizza Bread, Rusk, Sweets, Fish Fillets, Tapioca (sabu daana)
Beverages – Coffee, Tea, Juices
Fuel – Kerosene, LPG, Coal
Common Utilities – Broom
Medical Goods – Medicines, Stents
Newsprint
Lifeboats
Services
Railway Travel
Economy Class Air Travel
Cab Aggregators (e.g. Uber & Ola)
GST at 12%
Goods
Dairy Products – Butter, Cheese, Ghee
Packaged Dry Fruits
Food Items – Snacks (Namkeen & Bhujia), Packaged Chicken, Sausages
Beverages – Fruit Juices, Packed Coconut Water
Personal Hygiene – Tooth Powder
Stationery – Colouring Books, Picture Books
Common Utilities – Sewing Machine, Umbrella
Ayurvedic Medicine
Incense Sticks (Agarbatti)
Mobile Phones
Services
Non-AC Hotels & Restaurants
Business Class Air Travel
Work Contracts
GST at 18%
Goods
Dairy Products – Ice Cream
Preserved Vegetables
Food Items – Flavoured refined sugar, Pasta, Corn Flakes, Pastries, Cakes, Jams, Sauces, Soups, Instant Food Mixes, Processed Foods
Beverages – Mineral Water
Personal Hygiene – Tissues, Toilet Paper, Hair Oil, Soap Bars, Toothpaste
Stationery – Note Books, Envelopes, Fountain Pens
Electronic Equipment – Printed Circuits, Speakers, Monitors
Camera
Iron & Steel Products
Services
AC Hotels & Restaurants that serve liquor
Telecom Services
IT Services
Financial Services
GST at 28%
Goods
Food Items – Chocolates, Chewing Gum, Custard Powder
Beverages – Aerated Water
Personal Hygiene – Deodorants, Shaving Cream, After Shave, Hair Shampoo, Dye, Sunscreen, Perfume, Face Creams, Detergents
White Goods – Vacuum Cleaner, Shavers, Hair Clippers, Washing Machines, Dish Washers, Water Heaters & other Home Appliances
Automobiles & Motor Vehicles*
Housing Materials – Paint, Wallpaper, Ceramic Tiles, Cement
Weighing Machines, Vending Machines, ATM
Fireworks
Luxury / Demerit Goods* – Pan Masala, Tobacco, Aerated Drinks & Motor Vehicles
Services
Rooms and Restaurants in 5-star hotels
Race course betting
Cinema etc.
*Note – Luxury / Demerit Goods as listed above will also attract a compensation cess over and above the GST rate of 28%
Treatment of Luxury / Demerit Goods
In addition to the rates which have been fixed for major categories of goods and services, the GST council has approved the compensation rates for 5 luxury / demerit items. The proceeds of this cess will go into the compensation fund which would be used to bridge any tax revenue gap for states in the first five years of GST.
The items that will be levied with the compensation cess, over and above the GST rates which are applicable on them are as follows:
ItemsGST Rate ApplicableApproved Cess RangeCess Ceiling
Coal5%INR 400 / tonneINR 400 / tonne
Pan Masala28%60%135%
Tobacco28%61% – 204%INR 4170 / thousand
Aerated Drinks28%12%15%
Motor Vehicles**28%1% – 15%15%
**Note – The cess will be 15% for cars with over 1500 cc engine capacity, other sports and luxury cars. The cess will be 1% for smaller cars.
Yet to be decided
For the following goods, the GST rates are yet to be decided and would probably be taken up in 3rd July meeting –
Biri wrapper leaves (Tendu Patta) & Biris
Biscuits
Textiles
Footwear
Jewellery Items -Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, imitation jewellery and coins
Power Driven Machines & Machinery for industrial and agricultural uses.