Briefly explain the different rates of taxes applicable to goods and Services.

Introduction

GST is the biggest tax-related reform in the country bringing uniformity in the

taxation structure and eliminating the cascading of taxes that was levied in the past.

The GST Council meets from time to time to revise the GST rates for various

products. Several states and industries recommend reduction in GST tax rate for

various items which are discussed in these meetings.

Different rates of taxes applicable to goods and Services.

There is a lot of confusion regarding The Goods and Services Tax (GST) in the

market. One of the most awaited tax reforms in India; GST was introduced in July

2017 with an aim to make India 'one nation, one market, one tax'. However, with

the rollout of GST tax slab for various goods and services changed. The

government has categorised 1211 items under various tax slabs.

GST (Goods and Services Tax) is the biggest indirect tax reform of India. GST is a

single tax on the supply of goods and services. It is a destination based tax. GST

will subsume Central Excise Law, Service Tax Law, VAT, Entry Tax, Octroi, etc.

Here is a complete guide to various tax slabs applicable on goods and services for

the year 2017:

1. TAX SLAB: No tax (0%)

a. GOODS INCLUDED: There will be zero tax imposed on items such as jute, fresh

meat, fish chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and

vegetables, flour, besan, bread, prasad, salt, bindi. sindoor, stamps, judicial

papers, printed books, newspapers, bangles, handloom, bones and horn cores,

bone grist, bone meal, etc.; hoof meal, horn meal, cereal grains hulled, palmyra

jaggery, salt - all types, kajal, children's' picture, drawing or coloring books,

human hair, khadi purchased from khadi and village industries stores, clay

idols, brooms, cotton seed oil cake, charkha.

b. SERVICES: There will be no tax on hotels and lodges with tariff below Rs

1,000. A 0.25 per cent tax will be levied on rough precious and semi-precious

stones.

2. TAX SLAB:5%
a. GOODS INCLUDED: There will be a tax of 5 per cent imposed in products

like fish fillet, Apparel below Rs I 000, packaged food items, footwear below

Rs 500, cream, skimmed milk powder, branded paneer, frozen vegetables,

coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, stent,

lifeboats, Cashew nut, Cashew nut in shell, Raisin, Ice and snow, Bio gas,

Insulin, Agarbatti, Kites, Postage or revenue stamps, stamp-post marks, first-

day covers, Branded food, walnuts, dried tamarind, roasted gram, Dhoop batti,

Corduroy fabric, saree fall, Paper mache items, Oil cakes, Duty Credit Scrips,

Cotton quilts(quilts not exceeding Rs 1000 per piece), corals, Rosaries and

prayer beads, Hawan samagri, Grass, leaf and reed and fibre products, including

mats, pouches, wallets.

b. SERVICES: Transport services such as Railways, air transport, small

restaurants will be under the 5 per cent tax category because their main input is

petroleum, which is currently outside GST ambit. Textile job work will also be

taxed at 5 per cent.

3. TAX SLAB: 12%

a. GOODS INCLUDED: A 12 per cent tax will be imposed on apparel above Rs

1,000, frozen meat products, butter, cheese, ghee, dry fruits in packaged form,

animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth
 powder, agarbatti, colouring books, picture books, umbrella, sewing machine,

cellphones, Ketchup & Sauces, All diagnostic kits and reagents, Exercise books

and note books, Spoons, forks, ladles, skimmers, cake servers, fish knives,

tongs, Spectacles, corrective, Playing cards, chess board, carom board and other

board games, like ludo, rubber band, Wood, stone, metals, marble idols, Table

and kitchenware, Batters, including idli / dosa batter, Textile caps, sprinklers,

Cotton quilts( quilts exceeding Rs 1000 per piece ),Statues, statuettes, pedestals,

ceramic articles, porcelain items, ornamental articles, bells, gongs, non-electric

of base metal, animal carving material.

b. SERVICES: 12 per cent tax will be levied on services such as state-run

lotteries, non-AC hotels, business class air ticket, fertilisers and work contracts.

4. TAX SLAB: 18%

a. GOODS INCLUDED: 18 per cent tax will be imposed on goods such as

footwear costing more than Rs 500, trademarks, goodwill, software, bidi patta,

biscuits (all categories), flavoured refined sugar, pasta, cornflakes, pastries and

cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes,

mineral water, tissues, envelopes, tampons, note books, steel products, printed

circuits, camera, speakers, kajal pencil sticks, headgear and parts thereof,

aluminum foil, weighing machinery [ other than electric or electronic weighing

 machinery], printers [other than multifunction printers], electrical transformer,

CCTV, optical fiber, bamboo furniture, swimming pools and padding pools,

curry paste; mayonnaise and salad dressings; mixed condiments and mixed

seasonings, tractor parts, raincoats, medical grade disposable gloves, computer

monitors(up to 20 inch),custard powder, rice rubber rolls for paddy de-husking

machine, kitchen gas lighters.

b. SERVICES: Hotel services such as AC hotels serving liquor, Room tariffs

between Rs 2,500 and Rs 7,500, Restaurants inside five-star hotels will attract

12 per cent tax under GST slab. Other services such as telecom services, IT

services, branded garments and financial services are also in the slab.

5. TAX SLAB: 28%

a. GOODS INCLUDED: The good under 28 per cent tax slab includes - bidis,

chewing gum, molasses, chocolate not containing 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.

b. SERVICES: State Authorised private-run lotteries, hotels with room tariffs

above Rs 7,500, 5-star hotels, race club betting, and cinema are all under the

highest tax slab of28 per cent.

Conclusion

The goods and services tax (GST) have been presented as the major tax reform for

the Indian economy. It is therefore of importance to examine the impact it has had

on the economy, as well as on the citizens of the economy. The previous system

with no GST implies that tax is paid on the value of goods and margin at every

stage of the production process. This would translate to a higher amount of total

taxes paid, which is carried down to the end consumer in the form of higher costs

for goods and services. The implementation of the GST system in India is,

therefore, a measure that is used to reduce inflation in the long run, as prices for

goods will be lower.