The Goods and Services Tax (GST) is, perhaps, the largest tax-associated reform in India after independence, thus, bringing uniformity in the taxation structure and disposing of the cascading of taxes that were issued back in those days. The GST Council calls for meetings whenever there is a need for revising the GST rates that should be levied for various goods and services traded in the country. Several states and industries endorse discounts in GST tax prices for various commodities that are discussed in the meetings.

Here, we are going to provide you with some useful insight on the new GST tax rates for the year 2020, as well as learn more about the tax slabs and revisions made to the new GST rates for the list of various goods and services in India.

New GST Rates as of Year 2020

Broadly speaking, GST can be categorized in the following types:

1. Central Goods and Services Tax (CGST)
2. State Goods and Services Tax (SGST)
3. Integrated Goods and Services Tax (IGST)

The authorities desired to maintain the GST rates near the authentic rates. But, there have been variations in the case of a few items due to the changes in the economic system as well as customer preferences. Thus, certain products have been kept in the high tax bracket, i.e., 18 – 28 percent. However, upon inspecting the list, they observed that these commodities need to be considered as requirements and not as luxuries. This is why the GST rates were revised for commodities together with notebooks, exercise books and so on.

In the below list, we are going to look at the new GST tax rates for the year 2020 on a couple of commodities.

Type of Commodity with GST Rates

Here is a list of different types of commodities with new GST rates.

• Cut and semi-polished stones. The GST rate is 0.25 percent.
• Consumable items for the household, such as edible oil, sugar, spices, tea, coffee (instant coffee not included) and sweets. Also, other items that are covered in this GST slab include coal and life-saving drugs. The GST rate is 5 percent.
• Computers and processed food. The GST rate is 12 percent.
• Hair oil, toothpaste, soap as well as capital goods and industrial intermediaries are also covered in this GST slab. The GST rate is 18 percent.
• Luxury commodities like small-size vehicles, consumer appliances such as air conditioner (AC), refrigerators, premium vehicles, cigarettes, aerated drinks, and high-end motorcycles are covered in this GST tax slab. The GST rate is 28 percent.

Although consumable products such as sugar, tea, and coffee are covered in the GST tax slab having a rate of 5 percent, however, item such as milk is not included in the new GST tax slab. The idea behind this is to ensure that fundamental consumable food items are to be made available for anyone, however, immediate meals are kept out of this category.

As per the new GST tax rates, the fundamental commodities for households, such as hair oil and toothpaste, etc., have their tax rates reduced from 28 percent to only 18 percent. Indian sweets will have a tax rate of 5 percent, as per the new GST taxation regulation. Tax cost on coal has additionally been decreased from 11.69 percent to just 5 percent to be able to relieve the stress on electricity industries.

The new GST regulations also encourage the country’s domestic industries to have inline input credit for capital goods. Make in India marketing campaign is set to flourish after this reform.

GST Tax Rates on Commodities

The authorities have proposed a four-tier tax structure for all items and services under the slabs 5 percent, 12 percent, 18 percent, and 28 percent, respectively. After the recent revision of GST rates, those are the commodities that fall below the four tax slabs onward with the ones that do not bring any tax.

Download GST Rate List PDF: Click here

The best commodities are blanketed in this listing whose rates have been revised in numerous GST council meetings.

Zero or Nil GST Rate

In contrast to the commodities which have already been categorized under the “zero GST rate”, several items more have now been added to this category in the newly revised GST tax rates.

• Hulled cereal grains such as barley, wheat, oat, rye, etc.
• Bones and horn-cores unworked and waste of those products.
• Palmyra jaggery.
• Salt of every kind.
• Eyeliner cosmetics (pencil sticks not included).
• Children’s picture books, coloring books, and drawing books.
• Human hair (includes dressed, thinned, bleached or otherwise worked).
• Sanitary napkins.
• Vegetable preserved through different methods, which includes saltwater and other preservatives which are not fit for being immediately edible by humans.
• Music books or manuscripts
• Unit container-packed frozen vegetables that are uncooked or steamed and are usually sold as branded products.
• Dicalcium Phosphate (DCP) of animal feed grade that is in compliance with IS specification number 5470:2002.

Commodities in the 5 percent GST Tax Rate Slab

The commodities that have been included in the newly revised GST tax slab of 5 percent rate along with the already existing commodities are listed below:

• Cashew nuts (includes cashew nuts in shell)
• Ice and snow
• Bio-gas
• Insulin
• Marble rubble
• Incense sticks and kites
• Accessories or parts for carriages that are designed especially for differently-abled persons
• Fiber/Coir mats, matting, and floor covering
• Wind-based flour grinding device (Atta Chakki)
• Natural cork
• Stamp-postmarks, first-day covers, tax stamps or postage, etc.
• Coin collection (numismatics)
• Braille paper, typewriters, watches, hearing aids and other appliances to compensate for a defect or disability
• Fly-ash blocks
• Walking sticks

Commodities in the 12 percent GST Tax Rate Slab

The commodities that have been included in the newly revised GST tax slab of 12 percent rate along with the already existing commodities are listed below:

• Preparation of vegetables, fruits, nuts or other parts of plants, which includes pickle, jam, jelly, chutney, murabba, etc.
• Sauces, ketchup and mustard sauce, which excludes curry paste, mayonnaise and salad dressings, mixed condiments and mixed dressings
• Bari made of pulses, which includes mungodi
• Menthol and menthol crystals, peppermint, fractionated mint plants oil and spearmint oil
• All kinds of diagnostic kits and reagents
• Plastic beads
• Exercise books and notebooks
• Glasses for corrective spectacles and flint buttons
• Spoons, forks, skimmers, cake servers, fish knives, and tongs
• Fixed speed diesel engines
• Two-way radio (walkie-talkie) used by paramilitary forces, police, and defense, etc.
• Intraocular lens
• Corrective spectacles
• Playing cards, chess board, carom board and other board games, such as ludo, etc.
• Roughly squared cork
• Items manufactured from natural cork
• Agglomerated cork

Commodities in the 18 percent GST Tax Rate Slab

The commodities that have been included in the newly revised GST tax slab of 18 percent rate along with the already existing commodities are listed below:

• Eyeliner pencil sticks (Kajal)
• Dental wax
• Plastic tarpaulin
• School satchels and bags (other than the ones made from leather or composition leather), toilet cases, handbags and shopping bags (made of synthetic plastic material, cotton or jute), handbags made of other materials, which does not include wicker work or basket work
• Head-gear and its relative parts
• Precast concrete pipes
• Salt-glazed stoneware pipes
• Aluminum foil
• All goods, including hooks and eyes
• Tractor tires (rear only) and tire tubes (rear only)
• Tractor wheel rim (rear only), tractor center housing, tractor housing transmission and tractor support front axle
• Weighing machinery other than electric or electronic weighing machinery
• Printers other than multifunction printers
• Ball bearings, roller bearings, parts and related accessories
• Transformers and industrial electronics
• Electrical transformer
• Static converters (UPS)
• CCTV, which includes CCTV with video recorders
• Set-top box for TV
• Computer monitors (up to 17-inch monitors)
• Electrical filaments or discharge lamps
• Winding wires, coaxial cable, and optical fiber cables
• Perforating or stapling machines (staplers) and pencil-sharpening machines
• Baby carriages
• Instruments for measuring length, for use in the hand, such as tapes, measuring rods, micrometers, and calipers
• Bamboo furniture
• Swimming pools and paddling pools
• Televisions and monitors of up to 32 inches
• Power banks that are powered by Lithium-ion batteries
• Sports items, gaming consoles, and other related items with HS code 9504
• All other commodities with HS code 8483, which includes gearboxes, transmission cranks, and pulleys
• Other used or retreaded pneumatic tires made of rubber

Commodities in the 28 percent GST Rate Tax Slab

Since the GST Council meeting took place for the purpose of reducing the GST tax rates on some consumer commodities, which were specifically requested by consumers, therefore, taking their preferences into consideration, the authorities decided not to include any more commodities in this highest category of 28 percent GST rate tax slab.

GST Tax Rate Slabs for Services

In addition to the GST tax rates imposed on various goods or commodities in the country, the government has levied the same GST tax slab, which is 5 percent, 12 percent, 18 percent, and 28 percent, respectively, for various services that are rendered in the country. Only the healthcare and educational services have been excluded from this category of GST tax slabs for services rendered.

Zero or Nil GST Tax Rate Slab

This GST tax rate slab includes the following services:

• Chargeable services that are rendered on Basic Savings Bank Deposit (BSBD) account which were opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY).
• Hotel accommodation for transaction value per unit per day valued to Rs. 1,000 or less.

Services in the 5 percent GST Rate Tax Slab

The services that have been included in the newly revised GST tax slab of 5 percent rate along with the already existing services are listed below:

• Working for printing of newspapers
• Transport services in AC contract, stage or radio taxi
• Tour operator services
• Renting a motor cab without fuel cost
• Leasing of aircrafts
• Transport by air that is scheduled, or air travel for the purpose of pilgrimage via chartered or non-scheduled flights
• Print media ad space
• Goods Transported in a vessel from outside of India

Services in the 12 percent GST Rate Tax Slab

The services that have been included in the newly revised GST tax slab of 12 percent rate along with the already existing services are listed below:

• Rail transportation of goods in containers from a third-party other than Indian Railways
• Air travel, which does not include the economy class
• Food and drinks at restaurants without AC, heating or liquor license
• Renting accommodation for more than Rs. 1,000.00 and less than Rs. 2,500.00 per day
• Hotel accommodation for transaction value per unit per day ranging between Rs. 1,001.00, and Rs. 7,500.00
• Coaches, railway coaches, rolling stock without return of accumulated Input Tax Credit (ITC)
• Construction of building for the purpose of sale
• IP rights on a temporary basis
• Movie tickets costing less than or equal to Rs. 100.00
• Chit fund services by foremen

Services in the 18 percent GST Rate Tax Slab

The services that have been included in the newly revised GST tax slab of 18 percent rate along with the already existing services are listed below:

• Food and drinks at restaurants with liquor license
• Food and drinks at restaurants with AC and heating
• Outdoor catering
• Renting for accommodation for more than Rs. 2,500.00, but less than Rs. 5,000.00 per day
• Hotel accommodation for transaction value per unit per day is Rs. 7,501.00 or more
• Circus, Indian classical, folk, theatre and drama
• Supply of works contract
• Movie tickets cost more than Rs. 100.00
• Supply of food, shamiana and party arrangement

Services in the 28 percent GST Rate Tax Slab

The services that have been included in the newly revised GST tax slab of 28 percent rate along with the already existing services are listed below:

• Entertainment events, such as amusement facility, joy rides, casinos, ballet, theme parks, racecourse, merry-go-round, go-carting, water parks, and sporting events such as Indian Premier League (IPL), etc.

GST Tax Rates on Loans and Advances

The service tax which was previously imposed on loans has now been laid under the newly revised GST tax rate slab. Thus, the service tax was 15 percent, while the GST rate levied is 18 percent. However, this had raised concern to many individuals since the cost of the loan would then hike due to the increased rate of GST, which is three times more than the rate of service tax. In addition, there are several individuals who are concerned that this could have a negative impact on their EMIs as the rate has also increased. Nevertheless, the GST is not imposed on the repayment of the loan or on payment of interest on the loan.

However, it is to be noted that GST is only imposed on the processing cost and any other amounts paid to the bank, which does not include principal repayment and interest payment. All the other charges include loan processing fees, loan repayment charges, and other charges. The impact of GST rates on home loans and personal loans are stated as under:

• GST rate on the personal loan is 18 percent
• GST rate on home loan is 18 percent
• GST rate on car loan is 18 percent

More detail Check website https://cbic-gst.gov.in/gst-goods-services-rates.html

Conclusion

A few of the services that fall in the category of GST include petroleum products, electricity, land, etc. GST has virtually stood up to the expectations of diverse industries as a landmark tax reform in India. There are numerous industries that have been stricken by it, mostly in an optimistic sense.

The general population is overall quite satisfied with the up-to-date tax reform that has been customized as in keeping with the necessity of the products. Regular GST Council conferences have performed well to deliver applicable insight which can be useful to distinct forms of industries as well as the wants of the citizens.