GST Rates Structure 2017

The GST council has lifted the veil from GST rates across goods and services that will be applicable on different goods and services. GST council has made the much-awaited announcements around tax rates on various categories of goods. There has been a hype around these rates for a while and now these rates are finally in the public domain.

As soon as the GST rates were announced a huge wave of curiosity hit across industry and trade bodies. Everyone is evaluating their position as a result of this change.

The GST slabs are pegged at 5%, 12%, 18% & 28%. According to the latest news from the GST council, the tax structure for common-use goods are as under:

GST Rates Structure

Tax Rates
Edible oil, sugar, spices, tea, coffee (except instant)
Coal (instead of current 11.69%)
Mishti/Mithai (Indian Sweets)
Life-saving drugs
Computers, Processed food
Hair oil, toothpaste and soaps (currently at 28%)
Capital goods and industrial intermediaries (big boost to local industries)
Small cars (+1% or 3% cess)
Consumer durables such as AC and fridge
Luxury & sin items like BMWs, cigarettes and aerated drinks (+15% cess)
High-end motorcycles (+15% cess)
Beedis are NOT included here
In addition to the above, a few other items were mentioned in the Council’s announcement of rates. These items, and the applicable rates on them are as follows:

Sugar, Tea, Coffee and Edible oil will fall under the 5 per cent slab, while cereals, milk will be part of the exempt list under GST. This is to ensure that basic goods are available at affordable prices.

The Council has set the rate for capital goods and industrial intermediate items at 18 per cent. This will positively impact domestic manufacturers as seamless input credit will be available for all capital goods. Indeed, it is time for “Make In India”.

Coal to be taxed at 5 percent against current 11.69 per cent. This will prove beneficial for the power sector and heavy industries which rely on coal supply. This will also help curb inflation.

Toothpaste, hair oil, and soaps will all be taxed at 18 percent, where currently they are taxed at 28 percent. Most of the cosmetics and fast moving consumer goods (FMCG) brands should get the benefit of this tax reduction.

The ‘mithai’ from the neighbouring sweet shop might lose some of its flavour as Indian sweets will now be taxable at 5 per cent. If you have a sweet tooth, this could hurt your pocket a wee bit in the coming days.

Plus, it was announced that:
for restaurants serving alcohol, the tax bracket will be 18 per cent
education, healthcare are going to be exempted from GST
services on Non-AC restaurants will be 12 per cent.

Please be informed….