An Introduction of GST - One Nation, One Tax, One Market

An Introduction of GST – One Nation, One Tax, One Market

Why GST is opted by Indian Government: 

There are many reasons for opting GST but there are important reason given below:

  • Sale on Goods is taxed by States currently but not Services.
  • Manufacturing and services are taxed by Centre but not wholesale retail (except when it’s interstate).
  • The credit of VAT is not available against excise and vice versa.
  • VAT is computed on a value which includes excise duty or some other taxes. So cascading effect has affected the prices of goods and high prices are paid by consumers.

One Nation, One Tax, One Market

An Introduction of GST - One Nation, One Tax, One Market
An Introduction of GST – One Nation, One Tax, One Market

GST has been implemented since 1 July, 2017 in all over India. And also GST is applicable in Jammu & Kashmir since 8 July, 2017.

A trader (not engaged in inter-state supplies) dealing only in exempted goods/Services or where his turnover/Income is below Rs. 20 lakh in the financial year [for North-Eastern States (Asam, Arurachal Pradesh, Manipur, Meghalaya, Meghalya, Nagaland, Tripura, Sikkim, Uttarakhand and Himachal Pradesh) limit is Rs.10 lakh] is not required to register under GST.

Any trader whose turnover below Rs. 20 lakh (10 lakh for North Eastern States) which belongs to supply of goods and services within intra state can also go for voluntary registration to avail input tax credit.

But once registered, the traders will have to pay taxes on all supplies of Goods/services, even if turnover is less than Rs. 20 lakh (10 lakh for North Eastern States). And also monthly return would have to be mandatorily filled even if there were no transactions in a certain month.

A brief History of GST:

The GST was passed in Rajya Sabha on August 3, 2016 by a full majority. The GST Bill has been approved by the Lok Sabha on 8 August, 2016.

In 2000, Shree Atal Bihari Vajpayee (BJP Government) started discussion on GST by setting up an empowered committee. The committee was headed by Asim Dasgupta, (Finance Minister, Government of West Bengal).

It was introduced as The Constitution (One Hundred and First Amendment) Act 2016, following the passage of Constitution 101st Amendment Bill. The GST is governed by GST Council and its Chairman Union Finance Minister of India Arun Jaitley.

It is considered a Constitution (122 amendment) Bill, 2014.

An Introduction of Goods and Services Tax (GST)

Goods and Services Tax (GST), India’s biggest tax reform, is launched at midnight by Prime Minister Narendra Modi at Parliament’s historic Central Hall, in the presence of President Pranab Mukherjee on 1st July, 2017. It is the fourth time since Independence that an event will be held there at midnight.

It is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India to replace taxes levied by the central and state governments.

It is destination based Indirect Tax that will be levied on supply of goods and services.

GST will upgrade ease of doing a Business in India and also starting of new business in India.

Goods and Services Tax (GST) is a major initiative in the rebuild of indirect taxation in India. Combining all Central and State indirect taxes into a single tax would terminate cascading effect and facilitate a common national market.

Transactions made within a single state will be levied with Central GST (CGST) by the Central Government and State GST (SGST) by the government of that state.

For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central Government.

GST is a consumption based tax. So taxes are paid to the state in which the goods or services are consumed not the state in which they were produced/ manufactured.

Thus GST is a uniform tax regime in order.

It aims to give mutual powers to both the State and the Centre to make laws on the taxation of goods and services.

Exclusion from GST:

  • Tax on Petroleum Products
  • Tax on Liquor
  • Tax on Electricity

Dual GST Model:

France was the first nation which has introduced GST.

But Canada was the nation which has introduced first dual GST model (which tax model will be implemented in India).

Now Dual model of GST is applicable in India just like Brazil and Canada currently.

Dual GST Tax model is in which the Centre and the States simultaneously levying tax on a single taxable commodity as given below:

  1. SGST (State Goods & Service Tax – GST collected by the State Government.
  2. CGST (Central Goods & Service Tax) – GST collected by the Central Government.
  3. IGST (Integrated Goods & Service Tax – GST collected by the Central Government.

The CGST and SGST would be levied at rates to be jointly decided by the Centre and States. The rates would be notified on the recommendations of the GST Council.

Central Government will levy and administer CGST & IGST while respective states governments will levy and administer SGST.

Some important points regarding Rates under GST:

  • Rates of CGST & SGST shall be equal in any circumstances and it will be half of the rates stipulated for those specific Goods or specific Services. Example- If the goods under transaction attract 12%, then CGST for them is 6% and SGST for them is 6%.
  • In case of Local Invoice or Intrastate Invoice, CGST and SGST both need to be charged separately and to be mentioned in the Return accordingly.
  • Rates of IGST shall be equal to the sum of rate under CGST and rate under SGST. Thus in above example, rate under IGST is 12% (6+6).
  • In case of Central Invoice or Interstate Invoice, IGST need to be charged and to be mentioned in the Return accordingly.
  • Input Tax Credit shall be available for all these three taxes viz. CGST, SGST & IGST except in some cases.
  • GST will also be chargeable on Free Items or Samples given. Thus GST needs to be paid on all items being delivered to the customer.

GST on Exports:

Exports will be treated as zero rated supplies. No tax will be payable on exports of goods or services, however credit of input tax credit will be available and same will be available as refund to the exporters.

The exporters have two options either to export goods under Bond and claim refund of input credit or to export goods under rebate claim and claim the refund of output tax.

GST on imports:

Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country. The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed.

Right to tax in different Area:

(1) Alcohol for human consumption: The right to tax is with the state government.

(2) 5 Petroleum product: Crude oil, diesel, petrol, natural gas and ATF: The date of implementation of GST will be decided by the GST council.

(3) Entertainment tax imposed by Local bodies: The right to tax is with the state government (Additional 30 per cent entertainment tax being levied in Tamil Nadu apart from the GST rate, Adhia said that was the privilege of the state and nothing could be done about it.).

(4) Tobacco: The right to impose additional excise duty included in GST is with the center government.

GSTN:

Goods and Services Tax Network (GSTN) is a nonprofit organization formed to create a platform for all the concerned parties i.e. stakeholders, government, taxpayers to collaborate on a single portal.

The portal will be accessible to the central government which will track down every transaction on its end while the taxpayers will be having a vast service to return file their taxes and maintain the details.

GSP:

GSP stands for GST Suvidha Provider. To handle the huge IT requirements, the government, GSTN (has entrusted GSPs with the responsibility of providing the much needed support to taxpayers in the IT ecosystem for GST. But, while the extent of support provided by a GSP may be limited to providing enriched access to the G2B (Government to Business) portal, support provided by ASPs will extend much further and will address most taxpayer compliance difficulties.

ASP:

ASP stands for Application Service Provider. ASPs will act as a link between the taxpayers and the GSPs. ASPs will focus on taking taxpayers’ raw data on sales and purchases and converting it into the GST returns. This GST returns will then be filed on behalf of the filer with GSTN via the GSP. It’s a kind of sub-license generation. Major ASPs include JioGST, sahiGST etc.

State taxes that would be subsumed/included under the GST:

  • State VAT
  • Central Sales Tax
  • Luxury Tax
  • Entry Tax (all forms)
  • Entertainment and Amusement Tax (except when levied by the local bodies)
  • Taxes on Advertisements
  • Purchase Tax
  • Taxes on lotteries, betting and gambling
  • State Surcharges and Cesses so far as they relate to supply of Goods and Services

Central taxes that would be subsumed/included under the GST:

  • Central Excise Duty
  • Duties of Excise (Medicinal and Toilet Preparations)
  • Additional Duties of Excise (Goods of Special Importance
  • Additional Duties of Excise (Textiles and Textile Products)
  • Additional Duties of Customs (commonly known as CVD)
  • Special Additional Duty of Customs (SAD)
  • Service Tax
  • Central Surcharges and Cesses so far as they relate to supply of goods and services

Taxes which are excluded from the purview of GST:

  • Basic Customs Duty
  • Export Duty
  • Entry and Toll Tax
  • Road and Passenger Tax
  • Electricity Duty
  • Stamp Duty
  • Entertainment Tax
  • Road Tax
  • Property Tax levied by Local Bodies
  • Securities Transaction Tax (STT)
  • Central Excise on Petroleum Products and Liquor
  • VAT on Petroleum Products [(i.e. petroleum crude, high speed diesel, motor spirit(commonly known as petrol, natural gas and aviation turbine fuel)]
  • Profession Tax
  • License fee on entry of vehicles under THE CANTONMENTS ACT, 2006

A simple Example of GST Calculation:

Let us assume that the GST tax rate is 12%.

Suppose that the manufacturing cost of a Product A is 100 and assuming a GST of 12% the total amount is Rs. 112. The next step of taxation would be when the Product is sold to consumers, let’s say at a price of 150.

So the GST will charge another 12% on just the difference of Rs. 150 and Rs. 120 i.e. only 12% on Rs. 30 which is equal to Rs. 3.60 So the final price is Rs. 153.60 (150 + Rs. 3.60).

Important points:

  • Immovable Property is not taxable under GST.
  • GST is also applicable on Advance from Customers, as and when it is received from the customer, before raising invoice for the same. It needs to be declared in the Output GST Return (GSTR-1).
  • No Revision of Return is allowed under GST.
  • PAN is mandatory for GST Registration.
  • Only sales related details have to upload by 10th of next month. One return for SGST, CGST or IGST.
  • One person dealer will be assessed by one authority only either by state authorities or by central authorities.
  • Health and education authority is excludes from purview of GST.
  • Benefit of ITC will not be available for construction of building for self-use or renting.
  • If a building is sold after obtaining completion certificate, GST will not be applicable.
  • Full address of buyer has to be mentioned compulsorily in case of inter-state B2C (Business to Customer), If transaction is more than Rs. 50,000.
  • E-way bill has to be obtained compulsorily in case of inter-state transaction or more than Rs. 50,000.
  • HSN (Harmonized System of Nomenclature) code shall be used for classifying the goods under the GST regime.

For turnover upto Rs. 1.50 cr. no requirement to mention HSN Code.

For turnover above Rs. 1.50 cr. but upto Rs. 5 Crore Two digits of HSN Code is sufficient.

For turnover above Rs. 5 Crore Four digits of HSN Code is required.

For turnover which is result of imports or exports 8 digit of HSN code is required mandatorily.

Services will be classified as per the Services Accounting Code (SAC).

  • TDS under GST:

There is requirement of deduction of TDS at the rate of 1% under CGST and 1% under SGST  and in case of inter state supplies, 2%  of IGST from the payment made or credited to the supplier of taxable goods or services.

There is requirement of deduction of TDS where the total value of supply under a contract exceeds Rs. 2,50,000 Lakhs.

There is requirement of payment of TDS as tax within 10 days after the end of the month in which such deduction is made. It shall be paid to the Central Government for CGST/IGST and State Government for SGST.

  • Hotel Industry will get ITC on furniture, air-conditioner, equipment etc. but not on building.
  • Destination based Taxation system is followed in GST.
  • Tax Invoice (as per format prescribed) has to be issued in case of advance payment is received, from the customers, even if material is not issued.
  • In case advance refunded, then refund voucher (as per format prescribed) to be issued to all customers.
  • A summary return form in GSTR-3B will required to be filed on self-declaration basis for first 2 month i.e. July and August by 20th day of next month i.e., for the month of July, a summary return needs to be filed by 20th August after paying appropriate taxes, and for the month of August, the same needs to file by 20th September and further more respectively.
  • Registration is PAN-based, only one GST registration number can be allotted against one PAN. And it is compulsory.
  • Old Sales Tax/ Manufacturing Tax/ Service Tax Registration Numbers will be no more and new PAN based Registration Number for GST is applicable necessarily.

As Example: 09AAAAA0000A1Z5

Out of which first two digits are state code as per the 2011 Indian Census. (In which Registration is taken) – ’09’ is for Uttar Pradesh

State Code in GST Number:

Code State Code State
01 Jammu & Kashmir 02 Himachal Pradesh
03 Punjab 04 Chandigarh
05 Uttaranchal 06 Haryana
07 Delhi 08 Rajasthan
09 Uttar Pradesh 10 Bihar
11 Sikkim 12 Arunachal Pradesh
13 Nagaland 14 Manipur
15 Mizoram 16 Tripura
17 Meghalaya 18 Assam
19 West Bengal 20 Jharkhand
21 Orissa 22 Chhattisgarh
23 Madhya Pradesh 24 Gujarat
25 Daman & Diu 26 Dadra & Nagar Haveli
27 Maharashtra 28 Andhra Pradesh
29 Karnataka 30 Goa
31 Lakshadweep 32 Kerala
33 Tamil Nadu 34 Pondicherry
35 Andaman & Nicobar Islands

Next 10 digits (AAAAA0000A) are PAN number of the assesse because of a connection between the GST and the PAN database.

And 13th digits is alpha-numeric (1-9 and then A-Z) and is assigned based on the number of registrations a legal entity (having the same PAN) has within one State. For example, a legal entity with single registration within a State would have number 1 as 13th digit of the GSTIN (Goods and Services Taxpayer Identification Number). If the same legal entity goes for a second registration for a second business vertical in the same State, the 13th digit of GSTIN assigned to this second entity would be 2. Hence, a legal entity can register upto 35 business verticals within a State.

14th digit will be by default as Z. (digit is kept blank for future use)

15th digit is the last digit will be a check code which will be used for detection of errors.

  • Branch Transfer/ Stock Transfer will also attract GST.
  • Statutory Forms such as ‘C’ form/ ‘F’ form is not relevant in GST now.
  • There will be no GST on the sale and purchase of securities. That will continue to be governed by Securities Transaction Tax (STT).
  • Input Credit of Swachh Bharat Cess cannot be forwarded.
  • Input Credit of Krishi Kalyan Cess cannot be forwarded.
  • Provisions of Zero rated supplies are not applicable to EOUs, EHTP, and STP etc.
  • Zero rated supply means any of the following taxable supply of goods and/or services, namely-
  •       (i) Export of goods and/or services;
  • or
  •       (ii) Supply of goods and/or services to a SEZ developer or an SEZ unit.
  • It is also provided that the credit of input tax may be availed for making zero rated supplies notwithstanding that such supply may be an exempt supply.
  • GST shall be applicable on sale of Second Hand Goods. The buying and selling of second-hand goods will not attract Goods and Services Tax (GST) if sold at a price cheaper than the purchase price
  • E-commerce Operator (Snapdeal, Flipkart etc.) not required to register in seller’s state.

GST List of documents required for GST Registration for Individual:

  • Passport Size Photo
  • Active E-mail ID
  • Current Mobile Number
  • PAN card of the Individual
  • Aadhar Card of the Individual
  • ID proof of the individual: Passport/ Voter ID card/ Driving License.
  • Address proof of Office premises: (ANY 1)
  1. Electricity Bill/ Landline Telephone bill,
  2. Municipal Tax (Vera Bill) copy,
  3. Rent/Lease agreement (in case premises are rented) Consent letter (In case premises of relatives),
  4. Any Certificate or Record from Government Dept.,
  • Address proof of Residence of Individual: (ANY 1)
  1. Electricity Bill/ Landline Telephone bill,
  2. Municipal Tax (Vera Bill) copy,
  3. Rent/ Lease agreement (in case premises are rented) Consent letter (In case premises of relatives),
  4. Any Certificate or Record from Government Dept.,
  • Business Proof: Gumasta Dhara License (Registration Certificate)/ SSI License
  • Cancelled Cheque of Bank Account showing Name of account Holder. MICR Code, IFSC Code & Bank Branch Details.
  • First Page of Pass book OR Bank Statement.
  • Digital Sign of Authorized Signature
  • Authority Letter

The Advantages of GST:

  • It removes multiple taxation.
  • It creates India as a single market.
  • It taxes goods and services at the same rates so many disputes are   eliminated on tax matter.
  • It reduces taxes on manufacturers. Hence it increases their business and makes them more competitive at national and international level.
  • A seamless flow of Credit is available throughout the country. Hence evasion is minimized.
  • It is Favorable for common Man.
  • It is beneficial for Trade and Industry.
  • It is beneficial for Economy.
  • It is easy Tax administration.
  • A manufacture of Economic India.
  • It would create a business-friendly environment. And it is anticipated that GDP ratio would be increased by at least 2% if GST is implemented.
  • It would not only widen the tax regime by covering goods and services but also make it transparent.
  • It would free the manufacturing sector from cascading effect of taxes, thereby improving the cost-competitiveness of goods and services.
  • It would bring down the prices of goods and services and thereby, increase consumption. It would enhance the ease of doing business in India.

A brief Comparison between Previous Tax Rates and applicable GST Rates of Goods:

Goods Current Rate Rate after GST
Processed Milk at very high temperatures 8.41% 5%
Dairy spreads 17.99% 12%
Cheese (Dairy Product) 17.99% 12%
Cashew 9.41% 5%
Raisins 8.48% 5%
Other Dry Fruits and Nuts (Meva) 11.80% 12%
Grain without peels 2.64% 0%
 Sugar Confectionery  23.81% 18%
 Pasta, spaghetti, macaroni, noodles 23.11% 18%
 Fruits & Vegetables and other Food Products 13.13% 12%
 Pickle, Sauce and Marmalade  13.13% 12%
 Instant coffee 29.58% 28%
 Ketchup and sauce  14.97% 12%
 Incense stick (Agarbatti)  12.41% 5%
 Mayonnaise, Mixed Spices & Seasoning 18.89% 18%
 Mustard sauce 14.97% 18%
 Toppings spreads and sauce  14.97% 18%
 Sweet beetle  18.86% 18%
 Battleaxe 12.50% 12%
 Daal Badi (Mangodi) 13.04% 12%
 Solid ice sawdust snow 7.64% 5%
 Mineral Water 29.33% 28%
 Granite slab 16.32% 28%
 Marble Slab 28.66% 28%
 Bio gas 8.60% 5%
 Insulin 13.13% 12%
Methyl & Methyl Crystals, peppermint 14.50% 12%
 Kajal 17.14% 18%
 Washing Powder and Soap 29.58% 28%
School Bag 24.10% 18%
 spectacles Box 29.58% 28%
 Products made from bamboo 18.65% 18%
 Board made from rubber tree 29.58% 28 %
Timber and wood 15.29% 18%
Ply-board and Plywood  29.58% 28%
Picture Frame made from Wood 29.58% 28%
Kite 13.34% 5%
Painting and color filling book of Children 9.86% 12%
Mat and Floor covering made from Coconut fiber 8.53% 5%
Headgear and its part 29.51% 18%
Glasses & Flint buttons for eye glasses 13.11% 12%
Aluminum foil 29.53% 18%
Spoon, fork, pinch, tongs 13.04% 12%
Hook, hinge 18.89% 18%
Name and Number Plate 29.58% 28%
Dough grinding wind mill 18.84% 5%
Tractor spare parts (Engine) 29.58% 28%
Tractor spare parts (Tyre and Tube) 22.32% 18%
Tractor spare parts (Other Equipment and Tools)  18.84% 18%
 Borewell compressor pump 12.99% 12%
Air Compressor 29.53% 28%
Fire fighting machine 29.53% 28%
weighing machine 27.67% 28%
Printer 21.38% 18%
Xerox Machine 29.53% 28%
Fax Machine 29.53% 28%
UPS equipment 18.84% 18%
Inverter 29.53% 28%
stabilizer 29.53% 28%
LED Flashlight (Torch) 29.53% 28%
Recorder 21.07% 18%
CCTV 21.07% 18%
Walkie-Talkie used by Security Forces, Police and Paramilitary 12.99% 12%
TV Set Top Box 15.49% 18%
Fire and Theft alarm 29.53% 28%
Optical Fiber 18.84% 18%
Electric Wires 26.96% 28%
Sewing machine 18.84% 12%
Electric Wires for Business 18.84% 28%
Staplers and pencil sharpener 29.53% 18%
Electrical Switch and Wire 29.53% 28%
Car for handicapped 23.04% 18%
Baby cot 29.51% 18%
Lenses of spectacles 13.04% 12%
Frames of spectacles 18.89% 18%
Eyeglasses/spectacles (Eyeglasses to improve eye) 13.04% 12%
Plastic Furniture 29.51% 28%
Bamboo Furniture 25.28% 28%
Sports goods 13.13% 12%
Muddhas made of sarkanda and Phool bahari Jhadoo 2.57% 0%
Postage stamp & Seal and First day cover 3.50% 5%
Numismatic Coins (Collection of Old coins) 3.50% 5%

A brief review of rates on Goods and Services:

There are some GST Rates are provided for Goods as well as Services.

(1) Goods

In goods there are 7 slabs of tax rates i.e. 0%, 0.25%, 3%, 5%, 12%, 18% and 28%

Products Attracting 0% GST Rates:

  • Unpackaged Corn
  • Fresh fruits and vegetables
  • Wheat and Non Marked Flour
  • Non Marked Maida
  • Non Marked Besan
  • Jaggery
  • Milk
  • Eggs
  • Curd
  • Lassi
  • Butter
  • Open Cottage Cheese
  • Non Marked Natural Honey
  • Salt all types
  • Kajal (other than kajal pencil sticks)
  • Kumkum
  • Bindi
  • Sindur
  • Muddhas made of sarkanda and Phool bahari Jhadoo
  • Drawing and Color Books
  • Education Facility
  • Health Facility
  • Live Fish
  • Coffee beans (not roasted)
  • Fresh Turmeric (Other than in processed form)
  • Maize
  • Oats
  • Rice
  • Betel leaves
  • Bread-except when served for consumption and Pizza Bread (Branded or otherwise)
  • Prasadam supplied by religious Places like Temples & mosques etc.
  • Human Blood and its components
  • Postal Items like Envelope and Post Card etc. sold by Govt.
  • Wool (Not carded or combed)
  • Khadi Yarn
  • Coconut (coir fibre)
  • Jute Fibre
  • Indian National Flag
  • Glass Bangles

Products Attracting 0.25% GST Rates:

  • Diamonds, Non Industrial unworked or roughly shaped,
  • Precious Stones (Other than Diamonds) and semi-precious stones, unworked or roughly shaped,
  • Synthetic or reconstructed precious or semi-precious stones, unworked or roughly shaped,

Products Attracting 3% GST Rates:

  • Coin,
  • Imitation Jewellery,
  • Articles of Natural and Cultured Pearls,
  • Articles of Goldsmiths and Silversmiths,
  • Base Metals-Silver and Gold not further worked than semi-manufactured, Pearls – Natural or cultured –whether or not worked or graded but not strung, mounted and set,
  • Diamonds- whether or not worked, but not mounted or set.

Products Attracting 5% GST Rates:

  • Ultra High Temperature (UHT) milk
  • Milk and cream-concentrated milk including Skimmed Milk Powder and Edible Milk food for babies
  • Chena and Paneer bearing a registered brand name
  • Branded (registered) Natural Honey
  • Cashew Nuts
  • Dried Areca Nuts
  • Dried Areca Nuts
  • Dried Makhana
  • Raisin
  • Sugar
  • Tea (Other than unprocessed green leaves of tea)
  • Olive Oils and their fractions obtained solely from olives
  • Palm Oil and its fractions
  • Beet Sugar
  • Cane Sugar
  • Khandsari Sugar
  • Palmyra Sugar
  • Seviyan (vermicelli),
  • Pizza Bread,
  • Fish (fit for human consumption)
  • Ice and Snow
  • Tobacco Leaves
  • Natural graphite
  • Chalk
  • Granite crude or roughly trimmed
  • Mica including splitting mica waste
  • Iron ores and concentrates, Manganese ores and concentrates, Copper ores and concentrates, Nickel ores and concentrates, Cobalt ores and concentrates, Aluminium ores and concentrates, Lead ores and concentrates, Zinc ores and concentrates, Tin ores and concentrates and other ores and concentrates
  • Bio Gas
  • Coal
  • Kerosene PDS
  • Insulin
  • Compressed Air
  • Drugs or medicines including their salts and easters and diagnostic test kits
  • Incense Stick (Agarbatti)
  • Toys Balloons (made of natural rubber latex)
  • Erasers
  • Kites
  • Silk yarn
  • Woven fabrics of silk or of silk waste
  • Brochures- leaflet-and similar printed matter (whether or not in single matter)
  • Cotton or Cotton waste
  • Cotton sewing Thread
  • Cotton yarn (other than khadi yarn)
  • Woven fabrics of cotton
  • Coir mats-matting and floor covering
  • Building brick, Earthen or roofing tiles
  • Pawan Chakki (Air based Flour Chakki)
  • Solar System and Solar Water Heater
  • Numismatic Coins
  • Broomstick
  • Kerosene Pressure lantern
  • Branded Fertilizers
  • Artificial Kidney
  • Liquefied Petroleum gases (Household LPG),
  • Footwear (Retail Price upto Rs. 500)
  • Clothes (Retail prices upto Rs. 1000 per piece)

Products Attracting 12% GST Rates:

  • Live Horses
  • Cheese
  • Dates
  • Figs
  • Starches and inulin,
  • Prepared and preserved fish
  • Vegetables, Fruit, Nuts (Preserved)
  • James and Fruit Jellies
  • Yeasts and prepared baking powder
  • Roasted chicory and other roasted coffee substitutes
  • Namkeens, bhujia etc.
  • Soya milk drinks
  • Fruit juices
  • Marble and travertine blocks
  • Steam
  • Mineral or chemical fertilizers, (nitrogenous, phosphetic, potassic or mixture of these contents)
  • Tooth powder
  • Fountain or ball pen ink
  • Candles
  • Photographic plates and films for X-ray for medical use
  • Feeding Bottles and its Nipples
  • Latex Rubber Thread
  • Mechanical wood pulp
  • Chemical wood pulp
  • Greaseproof papers
  • Glassine papers
  • Cartons, boxes and cases of paper board
  • Music, printed or in manuscript, whether or not bound or illustrated
  • Calendars of any kind
  • Carpets and other textile floor coverings
  • Textile wall coverings
  • Walking sticks
  • Sand lime bricks
  • Fly ash bricks and fly ash blocks
  • Animal shoe nails
  • Geometry boxes
  • Sewing needles and machine
  • Spoons, forks
  • Bicycle pumps
  • Telephones for cellular networks or for other wireless networks
  • LED Lamps
  • Tractors (engine capacity upto 1800 cc
  • Bicycles and other cycles (not motorized)
  • Spectacles
  • Coir products (except coir mattresses)
  • Toys like tricycles, scooters etc.
  • Playing cards, chess board, carom board and other board games
  • Original sculptures and statuary (In any material)
  • Original engravings, prints and lithographs
  • Pens (other than fountain pens, stylograph pens)
  • Pencils (including propelling or sliding pencils), crayons, pastels, drawing charcoals and tailor’s chalk

Products Attracting 18% GST Rates:

  • Condensed milk
  • Malt (whether or not roasted)
  • Bidi wrapper leaves (tendu)
  • Indian katha
  • Pasta
  • Sugar confectionary (other than batasha)
  • Curry paste
  • Mayonnaise and salad dressings
  • Ice cream (whether or not containing cocoa)
  • Vinegar and substitutes for vinegar obtained from acetic acid
  • All organic chemicals other than gibberellic acid
  • Prepared driers
  • Printing ink, writing or drawing ink
  • Kajal pencil stick
  • Hair oil
  • Dentifrices- toothpaste
  • Enzymes, prepared enzymes
  • Propellant powders
  • Matches (Other Than Handmade safety Matches)
  • Waste, parings and scrap of plastics
  • Tubes, pipes and hoses, and fittings therefor, of plastics
  • Builder’s wares of plastics (not elsewhere specified)
  • PVC belt conveyor, plastic tarpaulin
  • Schools satchels and bags other than of leather or composition leather
  • Toilet cases
  • Handbags and shopping bags (of plastic material, cotton jute)
  • Artificial fur and articles thereof
  • Wood in rough
  • Wood sawn or chipped
  • Bamboo flooring titles
  • Tableware and kitchenware of wood
  • Cigarette paper
  • Carbon paper
  • Envelope letter cards
  • Paper or paperboard labels of all kinds (whether or not printed)
  • All synthetic filament yarn such as nylon, polyester, acryli etc.
  • Headgear (whether or not lined or trimmed)
  • Pre-cast concrete pipes
  • Glass fiber
  • Wire of iron or non-alloy steel
  • Stainless steel in ingots or other primary forms
  • Containers foe\r compressed or liquefied gas, of iron or steel
  • LPG stoves
  • Medical, surgical or laboratory sterilizers
  • Book binding machinery including book sewing machines
  • Weaving machines (looms)

Products Attracting 28% GST Rates:

  • Molasses
  • Chewing gum and chocolate
  • Cocoa butter, fat, oil
  • Cocoa powder not containing added sugar
  • Pan Masala
  • Other non-alcoholic beverages
  • Unmanufactured tobacco, tobacco refuse (other than tobacco leaves)
  • Waffles and wafers coated with chocolate
  • Cigars, cheroots
  • Marble and travertine (other than blocks)
  • Avgas (aviation gasoline)
  • Perfumes and toilet waters
  • Floor coverings of plastics
  • Retreaded or used tyres and flaps
  • Articles of artificial fur
  • Plywood, veneered panels and similar laminated wood
  • Glass mirrors, whether or not framed (including rear view mirrors)
  • Doors, windows and their frames and thresholds for doors
  • Razors and razor blades
  • Air conditioning machines
  • Refrigerators, freezers and other refrigerating or freezing equipment
  • Dish washing machine (household)
  • Electric or electronic weighting machinery
  • Fire extinguishers
  • Primary cells and primary batteries
  • Vacuum cleaners
  • Shavers, hair clippers and hair removing appliances (with self-contained electric motor)
  • Sound recording or reproducing apparatus
  • Motor vehicles for the transport of ten or more persons including the driver
  • Motor vehicles for the transport of goods (other than refrigerated motor vehicles)
  • Aircraft for personal use
  • Yachts and other vehicles for pleasure or sports, rowing boats and canoes
  • Goggles
  • Video games consoles and machines
  • Watch cases and part thereof
  • Wrist watches, packet watches and other watches including stop watches
  • Cinematographic cameras and projectors, whether or not incorporating sound recording or reproducing apparatus
  • Paints and varnishes
  • Deodorants
  • Shaving creams (pre shave or after save)
  • Hair shampoo, hair dye, hair cream
  • Sunscreen or sun tan preparation
  • Automatic goods vending machines including money changing machines
  • Household or laundry washing machine (Both wash and dry)
(2)Services

In services there are 5 slabs of tax rates i.e. 0%, 5%, 12%, 18% and 28%

 Services attracting 0% GST Rates:

  • Services by an entity registered under section 12AA of the income tax act, 1961 by way of charitable activities
  • Services by central government, state government, union territory, local authority or governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the constitution.
  • Services provided by central government, state government, union territory, local authority or governmental authority to a business entity with an aggregate turnover of up to 20 lakh Rs. (10 lakh in case of special category state) in the preceding financial year. (But this provision not applicable to services by: (i) Department of posts (ii) In relation to an aircraft or a vessel (iii) Transport of goods or passengers (iv) Renting of immovable property
  • Services by way of pure labour contracts of construction, erection, commissioning or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex.
  • Services by way of renting of residential dwelling for use as residence
  • Services by a hotel, inn, guest house, club or campsite (a unit of Accommodation below 1000 Rs. Per day or equivalent)
  • Services by way of transportation of goods by an aircraft from a place outside India upto the customs station of clearance in India.
  • Services by way of access to a road or a bridge on payment of toll charges.
  • Services by way of loading, unloading, packing, storage or warehousing of rice.
  • Transmission or distribution of electricity transmission or distribution utility.
  • Services by the reserve Bank of India.
  • Services by way of collection of contribution under the Atal Pension Yojana.
  • Services by way of collection of contribution under any Pension Scheme of the State Government.
  • Services by a veterinary clinic in relation to health care of animals or birds.
  • Services by way of collecting or providing news by an independent journalist, Press Trust of India or United NEWS of India.
  • Services of public libraries by way of lending of books, publications or any other knowledge enhancing content or material.
  • Services by an organizer to any person in respect of a business exhibition held outside India.
  • Services by way of slaughtering of animals.
  • Services by a foreign diplomatic mission located in India.

Services attracting 5% GST Rates:

  • Renting of motorcab where the cost of fuel is included in the consideration charged from the service recipient.
  • Selling of space for advertisement in print media.

Services attracting 12% GST Rates:

  • Transport of passengers by air, with or without accompanied belongings, in other than economy class.
  • Transport of goods in containers by rail by any person other than Indian railways.
  • Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) right in respect of goods other than Information Technology.

Services attracting 18% GST Rates:

  • Service in retail trade (does not include sale or purchase of goods)
  • Postal and courier services.
  • Electricity, gas, water, and distribution services
  • Real estate services.
  • Research and development services
  • Legal and accounting services
  • Telecommunications, broadcasting and information supply services
  • Support services to mining, electricity, gas and water distribution
  • Maintenance, repair and installation (except construction) services
  • Other manufacturing services; publishing, printing and reproduction services; material recovery services
  • Public administration and other services provided to the community as a whole; compulsory social security services.
  • Education services
  • Human health and social care services
  • Sewage and waste collection, treatment and disposal and other environmental protection services
  • Services of membership organizations
  • Domestic services
  • Services provided by extraterritorial organizations and bodies

Services attracting 28% GST Rates:

  • Accommodation in hotels including 5 star hotels, inns, guest houses, clubs (a unit of accommodation of Rs. 7,500 and above per unit per day or equivalent)
  • Services provided by a race club by way of toatalisator bookmaker in such club
  • Gambling

There is link given for GST Rates Finder App:

[ https://play.google.com/store/apps/details?id=in.gov.cbec.gsttaxratemanual ]

Composition Scheme

The composition scheme is available to all taxpayers whose annual turnover in a financial year up to Rs. 75 lakhs dealing in goods and is optional. And it also is available to North East States (Asam, Arurachal Pradesh, Manipur, Meghalaya, Meghalaya, Nagaland, Tripura, Sikkim and Himachal Pradesh) taxpayers whose turnover in a financial year upto Rs. 50 lakhs dealing in goods.

  • Under composition scheme, it is not required to maintain detailed records as in the case of a normal taxpayer.
  • In this scheme, benefit of Input Tax Credit is not allowed to composition scheme holder.
  • Composition Scheme Holder must mention “composition taxable person, not eligible to collect tax on suppliers” at the top of the bill of supply issued by him and mention “composition taxable person” on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place or places of business.
  • Assessee has to apply for this and then GST Official’s permission is required to opt for this.
  • If this scheme is availed, GST cannot be charged in the Invoices raised by the Assessee.
  • If this scheme availed in one year and for next year you intend to opt out of this scheme, you can apply to GST officials and take permission for the same i.e. either to Opt In or Opt Out of the scheme.
  • Service Providers shall not be eligible for the Composition Scheme except in case of restaurants.
  • All such registered persons can not opt to pay tax under composition scheme where more than one registered persons are having same PAN.
  • The composition scheme opted by a registered person shall be canceled with effect from the date on which his aggregate turnover exceeds the limit of Rs. 75 lakh during a financial year.
  • A taxable person who opted for composition scheme shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any input tax credit.

Category-wise GST Tax rate under Composition Scheme:

Category of Registered Persons Rate of Tax CGST Rate of Tax SGST Total Rate of Tax
Trader/Businessman 0.50% 0.50% 1.00%
Manufacturer 1.00% 1.00% 2.oo%
Restaurant 2.50% 2.50% 5.oo%

Composition Scheme is not Available, if:

  • A taxpayer who is involved in the activity of services.
  • A taxpayer who is involved in making any supply of goods which are excluded under composition scheme.
  • A taxpayer who is involved in making any inter-state outward supplies of goods.
  • A taxpayer who is involved in making any supply of goods through an Electronic Commerce.

Negative List of Composition Scheme:

3 Products are included in negative list of composition scheme, which are below mentioned:

  • Pan Masala
  • Tobacco and Preparation substitute available of Tobacco
  • Ice Cream and other edible Ice

Benefits of the Composition Scheme:

Limited Compliance: Lesser compliance w.r.t. online registration, furnishing of returns, tax payment, less interference and delay by refund and other processes.

Limited Tax Liability: on comparison with regular taxpayers, person taxed under Composite Scheme will be liable to pay tax at a rate not more than 2.5% instead of a standard rate of 18%

Quarterly return: Only quarterly return is required under this scheme. It is not necessary required to give detailed invoice. And supply bill is enough.

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