GST Tax Rates in India 2017 : All you need to Know

As the Goods and Services Tax(GST) has successfully been rolled onto every segment post-July 1, 2017, onwards, driving away the prices of every product and services on a new level. But there always remains a botheration to evaluate which goods and services have been affected under GST regime.

Let's see the differential impact of GST Tax Rates in India 2017 on the following items as under:

No Tax Rate

No Tax regime has been applied on your household items which are classified as follows:

• Unpackaged food grains

• fresh vegetables

• Unbranded atta/maida/besan

• Gur

• Milk

• Eggs

• Curd

• Lassi

• Unpacked paneer/natural honey

• Prasad

• Palmyra Jiggery

• Salt

• Kajal

• 'Phool-bhari jharoo'

• Children's drawing/colouring books

5 per cent Tax Rate

Sugar, tea, roasted coffee beans, edible oils, skimmed milk powder, milk food for babies, packed paneer, cashew nuts, raisin, PDS (Public Distribution System) kerosene, domestic LPG, footwear up to ₹ 500, Apparel up to ₹1,000, agarbatti (incense sticks), coir mats, matting and floor covers come under 5 per cent tax rate.

12 percent Tax Rate

Butter, ghee, almonds, fruit juice, packed coconut water, preparations of vegetables, fruits, nuts or other parts of plants including pickle, murabba, chutney, jam, and jelly, umbrella and mobiles fall under 12 percent GST Tax rate category.

18 percent Tax Rate

Hair oil, toothpaste, soap, pasta, corn flakes, soups, ice cream, toiletries, computers, and printers come under 18 percent Tax rate

28% Tax Rate on Goods

The highest GST rate of 28% comes in the category of items such as chewing gum, molasses, chocolate not consisting of cocoa, waffles and wafers coated with chocolate, pan masala, aerated water, paint, deodorants, shaving creams, after shave, hair shampoo, dye, sunscreen, wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, washing machine, ATM, vending machines, vacuum cleaner, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use.

GST Tax Slab for Services

5 per cent Tax Rate

The services which fall under 5% tax rate are classified as follows:

• Transport services like railways and airways

• Transport of passengers by air in economy class

• Supply of tour operators’ services

• Selling of space for advertisement in print media

• Small restaurants with a turnover of ₹ 50 Lakhs

• Transport of passengers by motor cabs and radio taxis

12 percent Tax Rate

The services which fall under 12 % tax rate are classified as follows:

• Business class air tickets

• Hotels, inns, guest houses, which have a room tariff of ₹1000 and above but less than ₹2500 per room per night

18 percent Tax Rate

The services which fall under 18 % tax rate are classified as follows:

• AC hotels which serve liquor to customers

• Hotels, inns, guest houses, which have a room tariff of ₹2500 and above but less than ₹.5000 per room per night

• IT services

• Telecom services

28 per cent Tax Rate

The services which fall under 28 % tax rate are classified as follows:

• Race club betting & gambling

• Five-star Hotels

• Entertainment & Cinema

GST Effect on Gold

Gold has always been widely preferred metal across generations in India. But as the GST Bill passes through every segment, even on gold post July 1, 2017, levies a fixed rate of 3% GST irrespective of higher than the formerly applicable taxes. Prior to GST levy, 1% excise duty and 1.5% VAT used to be applicable which comes out to be approximate of 5% GST. Although, customs duty continues to levy with GST and would be charged at 10%. But there will be fixed charges on taxation that would be levied at 5%. Overall, an approximate industry average processing charges revolve around 12% of the gold price. Pre GST, total taxes, and duties were charged nearly 14%. The big giants such as Titan, owner of the brand 'Tanishq' becomes the largest beneficiaries as of now in order to reduce the cost gap between the organized and unorganized players.

Effect of GST on Gold Price

Here, we can clearly assess the difference between pre-GST and post-GST by taking an example:

Pre GST scenario

The calculation is done in order to ascertain the jewellery price as follows :

Total price  Gold jewellery before GST = Price of Gold+Custom Duty at 10% +Excise duty at 1% +VAT at 1.2%+ Making charges on Gold jewellery

Taking base rate of Gold at ₹ 100, the calculation would be:

Total price  Gold jewellery before GST = (100+10+1.1+1.3+13.2)=₹125.6

Total Taxes and Duties levied pre-GST =(Custom duty+Excise+VAT)

                                                              =(10+1.1+1.3) =12.4%

Post GST scenario

The calculation is done for ascertaining the jewellery price post-GST as:

Taking base rate of Gold at ₹ 100, the calculation would be:

Total price  Gold jewellery after GST =Price of Gold+Custom Duty at 10% +GST at 3%+ Making charges on Gold jewellery+GST on making charges

=(100+10+3.3+13.2+0.7)=₹127.2

Total Taxes and Duties levied post-GST =(Custom duty+GST at 3%+GST on making charges at 5%)=(10+3.3+0.7) =14%