Probable GST Tax Structure 2017
The 17th GST council meeting held on 18th June, 2017 finalized the following tax rates under GST:
GST Rates on Goods
GST rates for Services
Commodities
|
GST RATE
|
|---|---|
| Essential farm produced mass consumption items like milk, cereals, fruits, vegetable, jaggery (gur), food grains, rice and wheat |
NIL
|
| Common use and mass consumption food items such as spices, tea, coffee, sugar, vegetable/ mustard oil; newsprint, coal and Indian sweets |
NIL
|
| Silk and jute fibre |
NIL
|
| Gold, Silver and Processed Diamonds |
3%
|
| Railway freight |
5%
|
| Pharma (Life saving drugs) |
5%
|
| Footwear up to Rs. 500 |
5%
|
| Cotton and natural fibre |
5%
|
| Packaged foods like pickles, tomato sauce, mustard sauce and fruit preserves |
12%
|
| Ayurvedic and homeopathy medicines |
12%
|
| Processed foods |
12%
|
| Fruit juices, live animals, meats, butter & cheese |
12%
|
| Mobile phones |
12%
|
| Readymade garments |
12%
|
| Computer printers |
18%
|
| Footwear above Rs. 500 |
18%
|
| All FMCG goods like hair oil, soaps, toothpaste and shampoos; chemical and industrial use intermediaries |
18%
|
| LPG stoves, military weapons, electronic toys |
18%
|
| Pastries, cakes, pasta, ice creams, soups |
18%
|
| Man made fibre and yarn |
18%
|
| White and brown goods like TV, refrigerator, AC, washing machines, microwave ovens; soft drinks and aerated beverages |
28%
|
| Cement |
28%
|
| Perfumes, revolver, pistols |
28%
|
| Chocolates, chewing gum, waffles containing chocolate |
28%
|
| Luxury and de-merits goods and sin category items e.g. tobacco, pan masala |
28% + cess
|
| Small cars – petrol driven |
28% + 1% cess
|
| Small cars – diesel driven |
28% + 5% cess
|
| Cigarettes |
28% + 5% cess
|
| Luxury cars |
28% + 15% cess
|
| Heavy bikes, Luxury yachts, private jets |
31%
|
Services
|
GST RATE
|
|---|---|
| Sleeper, metro tickets and seasonal passes |
NIL
|
| Outsourcing (in industries such as gems and jewellery, textiles) |
5%
|
| Railways (AC) |
5%
|
| Restaurants with annual turnover less than Rs. 50 lakhs |
5%
|
| Cab aggregators like Ola, Uber |
5%
|
| Hotels with tariff Rs. 1,000 - 2,500 |
12%
|
| Non-AC restaurants without liquor license |
12%
|
| Real estate (Work contracts) |
12%
|
| State run lotteries |
12%
|
| Airlines (Business class) |
18%
|
| Telecom, financial service |
18%
|
| Hotel room tariff Rs. 2,500 - 7,500 |
18%
|
| Hotel room tariff above Rs.7,500 |
28%
|
| AC restaurants with liquor license |
18%
|
| Movie tickets below Rs. 100 |
18%
|
| Movie tickets above Rs. 100 |
28%
|
| 5 star hotels |
28%
|
| State authorized lotteries |
28%
|
A four tier GST tax structure as above has been proposed by the GST Council. Keeping zero or very low rates for essential food items which makes up the half of the consumer basket will ensure that there is no widespread inflation due to implementation of revised tax slabs under GST. At the same time, luxury goods and negative items would be taxed at a significantly higher rate so as to ensure revenue neutrality for central and state governments once the new GST tax rates are implemented.
An additional concessional GST tax slab is likely to be implemented for gold and other precious metals that currently attract only 1% VAT.
An additional concessional GST tax slab is likely to be implemented for gold and other precious metals that currently attract only 1% VAT.
The proposed GST rates are likely to ease burden on common man as the rates are lower than existing tax on most mass consumption items. Finance Minister Mr. Arun Jaitley has expressed confidence that GST will not be inflationary.
