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The introduction of GST (Goods and Services Tax) has changed the face of the Indian tax system by bringing in uniformity and transparency. It is one of the most significant tax reforms introduced to eliminate the cascading effect of the earlier tax system.
GST is collected at each level of the supply chain, thus eliminating the cascading effect of tax. This game-changer tax reform has helped businesses in various ways to boost the company and the economy as a whole.
Small and medium enterprises can benefit from the more competitive space due to the introduction of the Goods and Services Tax. GST has reduced logistics costs and made the nationwide market easily accessible for SMEs for the future expansion of business.
What are GST rates in India?
Various GST rates have been defined to enhance transparency and trust between the customers and sellers in the taxation process. Each of these slabs includes different categories of items depending on certain parameters.
These rates are decided by the GST Council. This Council revises the rate slab of goods and services periodically. The GST rates are usually high for luxury supplies and low for essential needs. In India GST rate for various goods and services is divided into four slabs: they are 5% GST, 12% GST, 18% GST, & 28% GST.
GST Rate changes from 1st January 2023
The government has raised the goods and services tax on items such as clothes, textiles, and footwear from 5% to 12%. The GST rate on textiles has been raised to 12% from 5%, and the GST rate on garments of any value has been raised to 12% from 5%.
In addition, Razorpay can help you grow your business through an automated payment system with GST-compliant tariffs.
Classification of items under the several GST rate slabs
Let’s look at GST rates or GST tax slab rates for India’s various popular goods and services.
The Latest GST rate revision in the council meeting
The following are the latest GST Council Meetings where the Revised GST Rates were announced.
GST Rate revision in 45th GST Council Meeting
The 45th GST council meeting was held on 17th September 2021 and the following decisions had been taken revolving around the GST rates.
|Category||Old Rate||New Rate|
|Railway goods, locomotives, and parts||12%||18%|
|Metal concentrates and ores||5%||18%|
|Renewable energy devices||5%||12%|
|Scrap and plastic waste||5%||18%|
GST Rate revision in 44th GST Council Meeting
The 44th GST council meeting was held on 12th June 2021 and the following decisions had been taken regarding the GST rates effective up to 30th September 2021.
|Category||Old Rate||New Rate|
|Equipment to cheek body temperature||18%||5%|
GST Rate revision in 43rd GST Council Meeting
- GST on the export of relief goods will be exempted and will stay in effect until 31 August 2021.
- GST on import of certain medicines are also placed under the exemption list.
- Any Covid-related relief item that’s been imported with the intention of donating to the government or any relief organization will be exempted from IGST till 31 August 2021.
- Amnesty Scheme was announced by the finance minister to reduce late fee returns. Small taxpayers can file gst returns under this scheme.
GST Rate revision in the 42nd GST Council Meeting
Here are the highlights of the meeting held on October 5, 2021.
- Small taxpayers with a turnover of less than 5 crore INR can now file quarterly GSTR-3B and GSTR-1 forms where the due date for GSTR-1 will be the 13th day of the month succeeding the quarter. This rule came into effect on 1 January 2021. Due to the implementation of this rule, the number of returns has reduced to 8 from 24.
- The quarterly taxpayers have the option of paying 35% of the net tax liability of the previous quarter, using an auto-generated challan for the first two months of the quarter.
- For the auto-generation of GSTR-3B, a roadmap is prepared, where the details of the supplier’s GSTR-1 will help in auto-populating the ITC. Taxpayers will pay their GST through a simple challan.
- Taxpayers with a turnover of 5 crore INR and above will have to mention a 6-digit HSN code. A 4-digit HSN code is to be mentioned by taxpayers with a turnover of less than 5 crore INR.
- Bank accounts which have their PAN linked with Aadhaar will be able to receive refunds.
- ISRO, Antrix Corporation, and New Space India Limite (NSIL) will receive GST exemptions to encourage the space launching services in India.
- Sanitisers that are non-alcoholic will be continued to be taxed at 18% GST.
- The compensation cess collected till date amounts to 20,000 crore INR. This amount was disbursed to specific states in India by 5 October 2020.
GST Rate revision in the 41st GST Council Meeting
The 41st GST Council meeting was chaired by the Union Finance Minister and was held on 27 August 2020. The new revision states the government will provide an additional 0.5% relaxation in states where the borrowing limit is under the FRBM Act. States can now borrow more due to the damage caused by the coronavirus outbreak.
FAQs on GST rates
What is the GST rate on gold in India?
The GST rate of gold in India is 3%.
What is the GST rate on mobile phones?
The GST rate on mobile phones is 18%.
Who decides GST rates?
The Central Government decides the GST rates in the country.
What is the GST rate on laptops?
The GST rate on laptops is 18%.
What is the GST rate on cement?
The GST rate on cement is 28%.