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GST and GST Bill Rates

GST is an indirect tax system imposed by the Government of India. It consists of all the indirect taxes such as VAT, Service tax, etc. It came in to effect in 2017.

There are three types of GST:

  1. Central GST or CGST
  2. State GST or SGST
  3. Integrated GST or IGST

 CGST: In CGST, the tax is levied by the Central Government of India, and it replaced the service tax, SAD(Special Additional Duty), ADE( Additional Duties of Excise). It is applicable for the supplies of goods and services in intra-state, and the revenue collected through CGST goes to the government.

 SGST: In SGST, the tax is levied by the State Government, and it replaced the sales tax, VAT, entertainment tax, purchase tax. It applies to intra-state goods supplies, and the revenue goes to the state government. The seller collects the CGST and SGST from the buyer.

 Example of CGST and SGST: Let's suppose Dinesh is a dealer of baby products who sold goods of Rs 10,000 to some company in the same state. In this case, the GST will be 18% which includes 9% CGST and 9% SGST which means that dealer collected 1800, 900 will go to central government, and 900 will go the state government.

IGST: The IGST act governs IGST and applies on the inter-state supply of goods and services along with imported as well as exported goods in and from India. The state and central government levy it together, but the central government used to collects the tax.As per the latest highlight of 25th GST council, the collections of worth Rs 35,000 crores from Integrated GST will be divided among the central and state government.

GST Latest Updates-2019

The latest updates on Goods and Service Tax (GST) - 2019 is here:

  • The 32nd GST Council meeting was held on 10th January 2019 at New Delhi, chaired by Shri Arun Jaitley. The announcements made in this meeting gave relief to MSMEs and small traders. Here is a list of the key takeaways of the meeting:

    • An increase in the GST registration limit from Rs. 20 lakhs to Rs. 40 lakhs for suppliers of goods.

    • The turnover limit to join the scheme is increased to 1.5 crores, and the tax must be paid quarterly and the returns must be filed annually starting from 1st April 2019. These changes were made to the existing composition scheme.

    • The turnover limit to join the scheme is set to Rs. 50 lakhs and the tax rate to 6% for the New Composition Schemes.

    • There were no rate cuts announced.  GoMs were formed to study the taxation of lotteries and under-construction properties.

    • Calamity cess for 2 years is charged up to 1% for supplies made within the State of Kerala.

  • The 33rd GST Council meeting was initially supposed to be held on 20th Feb 2019 via video conferencing but was later delayed to 24th Feb 2019 to meet at Delhi due to the refusal by some state FMs as the general elections were around the corner. It was chaired by the Finance Minister, Arun Jaitley. This was the first meet after the Interim Budget 2019. The sops announced by the GST Council promise to boost the real estate selling henceforth, ensuring the rate cut benefits to the neo and middle-class home buyers.

    • The affordable housing GST rate slashed to 1% from 8% without any benefit to the Input Tax Credit (ITC). However, the earlier proposal pointed out that the rate must be slashed down to 3% without the ITC benefit.

    • GST rate for non-affordable housing slashed to 5% without ITC from the existing rate of 12%.

  • The 34th GST Council meeting, chaired by Shri Arun Jaitley, was held on 19th March 2019 via video conference. The meeting was held to pass the notifications drafted by the legal and the rate fitment committees on the recent housing rate cuts. These rate cuts were announced at the 33rd GST Council meeting that was held on 24th February 2019. The highlights of this meeting are:

    • The committee approved the transition plan to implement the new tax structure for housing units.

    • The rates for new projects to be mandated from April 1.

    • Builders of existing housing projects must choose either of the two alternatives:

      • Choose the current rate of 12% (8% for affordable housing) and charge this GST rate in the invoices raised. Further, the ITC benefit is available to the buyer.

      • Choose to bear GST at a rate of 5% (1% for affordable housing). The benefit of ITC will not be available to the builder for the procurements used in construction.

    • Whoever chooses the second option must reverse the ITC that was accumulated on their closing stock of properties that are under-construction within six months.

    • A new rate of 5% (1% for affordable housing) is applicable to the residential properties whose construction is going on after 31st March 2019 or any new projects launched after 1st April 2019. Here, the ITC procurement benefits will not be available to the builders.

  • On 28th Mar 2019, the due date for ITC-04 of July 2017-March 2019 was extended to 30th June 2019.

Rate of GST on Some Common Items

The government proposed a 4-tier tax structure for all the goods and services under these 4 slabs- 5%, 12%, 18%, and 28%. Also, there are a few goods for which there is no tax. You can simply go through the table and find out the recent tax rates of some of the common items that fall under the 4 slabs.

Tax Rates

Products

28%

Luxury items such as small cars, premium cars, cigarettes, aerated drinks, consumer durables like AC and refrigerators, high-end motorcycles, etc.

18%

Toothpaste and soaps, capital goods, hair oil, and industrial

intermediaries are covered in this slab.

12%

This includes processed food and computers.

5%

Household necessities such as edible sugar, spices, oil, tea, and coffee (except instant) are included. Mishti/Mithai (Indian Sweets), Life-saving drugs and coal are also covered under this slab.

  • Edible items like sugar, tea, and coffee were included in the 5% tax slab, but milk does not attract any tax under this new GST regime. The idea here is to ensure the availability of basic food items to everyone. Instant food does not fall under this category.

  • Basic household items like toothpaste, hair oil, etc. that attracted 28% tax, will be now taxed at 18% only.

  • Sweets are also taxable at 5%.

  • The tax rate on coal is reduced from 11.69% to 5% to relieve the pressure on power industries.

  • GST also tries to give a push to the domestic industries. Make in India campaign is set after this reform.

No Tax

We started enjoying the zero GST tax rate for the goods mentioned below as it is added to the previous list on the 11th of June:

  • Hulled cereal grains like wheat, barley, oats, rye, etc.

  • Wastes of the bones and horns

  • All types of salt

  • Palmyra jaggery

  • Dicalcium Phosphate of animal feed grade conforming to IS specification No. 5470:2002

  • Kajal [other than pencils and sticks]

  • Drawing books, picture books, and coloring books for children

  • Human hair – thinned, bleached, dressed or otherwise worked

  • Unit container-packed frozen branded uncooked/steamed vegetables

  • Sanitary napkins

  • Music books/manuscripts

  • Vegetables preserved using different techniques including brine and other preservatives, which are not suitable for immediate human consumption.

Latest update on GST rates 2018:

On 18th January, 2018 the 25th GST council held in which rates of 29 goods and 53 services were decreased to lower slabs

Revised GST Rates with effect from January,2018:

 

Good/Service

Current GST Rates

Revised GST Rates

Diamonds & precious stones

3%

0.25%

Old and used motor vehicles [medium and large cars and SUVs,Services & of admission to theme parks, water parks, Public transport buses running on biofuel, & etc.

28%

18%

LPG for household domestic consumers, satellites and payloads, Tailoring services, raw materials needed for launch vehicles, etc.

18%

5%

Sugar boiled confectionery, Drinking water packed in 20 litre bottles, Biodiesel, Drip irrigation system Mechanical sprayer, building joinery, Transportation crude petroleum and products, Metro and monorail projects, Common effluent treatment plants. Services for treatment of effluents, for drilling services in respect of the said goods, etc.

18%

12%

Old and used motor vehicles

28%

12%

Articles of straw, esparto or other plating materials, Velvet fabric, etc.

12%

5%

Under section 9 (5) of GST Act Small housekeeping service providers

nil

5%

Actionable claim in the form of chance to win in betting and gambling including horse racing

nil

28%

Rice bran(other than de-oiled rice bran)

0%

5%

Cigarette filter rods

12%

18%

Latest GST News 2018:

In an attempt to widen tax base and rates, the GST council is working for streamlining rates of GST. Currently GST is divided into four slabs-5%,12%,18% and 28%

GST Rates 2017:

The GST Council in its 23rd meeting on November 10, 2017, suggested changes in the GST. & The council took the decision to keep the highest 28% tax on luxury and sinful items; as a result, 178 goods have been removed from 28% category and shifted to the 18% bracket. GST on many things has also been decreased.

The government has categorised & the items in five major brackets - 0%, 5%, 12%, 18% and 28%.

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