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In India, the Goods and Services Tax (GST) has a range of indirect taxes and the same GST rate is applicable across India.
The key benefits of having uniform GST rates across India includes the following:
There are numerous advantages of the GST that benefit the traders and service providers.This structure has brought the country
to follow a uniform tax structure, encouraging uniformity in tax rates.The government has also made GST accessible via its online
portal,which anyone can access easily through GST registration and login.
In India, GST rates refer to the tax percentage rate that is applicable to different goods and services supplied in India. As per current GST rules, there are four different types of GST in India:
The CGST, UTGST and SGST rates are applicable to intra-state/intra-union territory transactions and have the same rate. IGST is applicable to inter-state or inter-union territory transactions and is the sum of CGST and SGST or UTGST.
Currently the most common GST rates on goods in India are 0% or nil rated, 5%, 12%, 18%, and 28%. Two of the lesser common GST rates applicable to goods in India are 0.25% and 3%. In other cases, such as the GST composition scheme, slightly lower GST tax rates of 1.5%, 5% or 6% are applicable. But in this case, the rate of GST is applicable to the turnover generated by the GST-registered entity and not the goods supplied.
A number of goods used in our daily lives feature a 0% or nil-rate of GST in India. The main reason for this low rate is to ensure that the supply of these daily-used goods is made possible at the lowest cost.
Below are some common examples of the lowest i.e. 0% GST rate products in India:
| Fresh Milk and Pasteurised Milk | Rice (not labelled or pre-packaged) |
| Fresh Meat (not pre-packaged) and Eggs | Fresh Curd and Paneer (not pre-packaged) |
| Fresh Fruits and Vegetables | Natural Honey (not branded/pre-packaged) |
Some everyday goods that feature the 5% GST rate in India are as follows:
| Sugar and Tea | Milk food items for babies |
| Indian sweets | Hearing aids |
| Radio/App-based Taxis | Economy-class flight and Railway tickets |
Some daily use goods that feature the 12% rate of GST are listed below:
| Computers and Mobile phones | Packaged Ghee |
| Business class flight tickets | Fruit juices or Fruit Pulp-based drinks |
| Preserved Fruits and Vegetables | Condensed Milk |
Quite a few GST goods feature 18% GST rate some of these are as follows:
| Mineral Water (natural or artificial) | Pasta |
| Life Insurance and Health Insurance | Cornflakes |
| Toothpaste | Computer Monitors |
A number of luxury goods in India feature the highest 28% GST rate. Additionally, Compensation cess is applicable on certain items such as Cigarettes, Passenger car etc.
Examples of highest GST rate include the following:
| Caffeinated Beverages | Cigars and Cigarettes (tobacco-based), Pan Masala |
| Passenger Cars | Portland/Slag/Aluminous Cement |
| Air Conditioners | Dish Washing Machines |
The above list of goods and services across various GST rates are for illustrative purposed only and not exhaustive. You can find the complete list of products and services along with applicable GST rates on the official website (cbic-gst.gov.in).
GST rates are applicable on selling price of the goods/services to arrive at the price that the consumer will pay. When you file for GST returns monthly, you will have to pay the calculated GST charges to the government.
As a trader/ service provider, you must factor in all the prospects, including exempted supplies, ineligible and eligible ITC, and inter-state sales. The key benefit of calculating the GST rates correctly is that you can easily avoid the 18% interest rate you will have to pay in case you pay less than what you are supposed to.
You can also use the GST rates calculator online to know your estimate simply. You can calculate the amount under different categories such as current ledger balance, return filing month, tax liability and more. It is best to be aware of the numbers and submit the GST on time so you can avoid any legal action. Since the GST has come into action, numerous businesses have garnered numerous benefits and have avoid financial losses.
Here’s the GST rates calculation formula-
Goods and Services Tax amount = (Original price x Current GST rate) / 100
Determine the net price= GST amount + Original price of product/ service
Suppose a product or a service costs Rs. 800, and the GST applicable is 12%, then you net price of product will be 800+(800 X (12/100)) = 896.
Using this formula, you can find out the GST tax rates easily.
ARN: Jan24/Bg/07J
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