Last updated on October 23rd, 2017 at 03:43 pm
The Goods and Services Tax (GST) is an Indirect Tax. The introduction of this tax has revolutionized the Indian Taxation System. It is basically a Value Added Tax that is levied on the manufacture, sale, and consumption of goods as well as the services at the national level. It has been one of the essential things that have caught a lot of attention in the market scenario. It is an eye candy in the world on marketing and business.
On 8th of September 2016, the President of India Mr. Pranab Mukherjee, gave an acknowledgment to this Bill, making an Act. Later, this GST Act was passed in Lok Sabha on 29th March 2017, and it came into an effect from 1st on 1st July 2017.
The Government has categorized the GST in 3 parts:
- Central– levied by the Union Government on India
- State– levied by the Various State Government
- Integrated– Levied by the State Government when there is a movement of the goods from one state to another.The GST Rates comprises of the CGST + SGST which is equal or half of the below-given rates.
The GST Rates on Goods are categorized into -0%, 2.5%, 3%, 5%, 12%, 18% and 28%.
Whereas, the GST Rates on the Services or categorized into- 0%, 5%, 12%, 18%, 28%.
Nil Tax (0%)
- Goods– No tax will be imposed on the items like milk, eggs, jute, natural honey fresh fruits and vegetables, curd, sindoor, human hair, children;s coloring books, newspapers, printed books, jaggery, salt, bone meal, Kajal etc.
- Services– No taxes will be imposed on the services like: Hotels and Lodges with tariff below Rs 1000, Grandfathering services have been exempted, Services by the Reserve Bank of India, Service provided by the Public Libraries etc. Rough precious and semi-precious stones come under the tax imposition of 0.25%.
- Goods– Items such as fish fillet, packed food items, apparels under Rs 1000, coffee, tea, revenue or postage stamps, tea, agarbattis, raisin, branded paneer, kerosene, coal etc imposes a GST of 5%.
- Services– Transport Services (railway and air transport), small restaurants, textile job etc fall under 5% GST.
- Goods– Apparels above Rs 1000, frozen meat products, notebooks, ketchup, cell phones, umbrella, notebooks, spoons, chess boards, tooth powder, Ayurvedic medicines etc fall under the umbrella on 12% GST.
- Services– Non-AC Hotels, State run Lotteries, Business Class air tickets, Work contracts etc impose 12% GST.
GST (18%)- Most on the items fall under this tax slot.
- Goods– Footwears costing more than Rs 500, biscuits, ice creams, bidi, instant food mixes, speakers, camera, monitors, aluminium foil, machinery products such as weighing machinery, printers, CCTV, Bamboo Furniture, Optical Fiber, cornflakes, sugar, pasta, tractor parts, salad dressings, headgear, steel products, envelopes, tampons, jams, sauces etc fall under 18% GST Slab.
- Services– AC hotels that provide liquor, telecom services, branded garments, and financial services, restaurants inside the 5-star hotels etc attract the tax slab on 18%…
- Goods– Chewing Gums, Waffles, Wafers, water heaters, automobiles, motorcycles, hair shampoo, dye, sun screen, wallpaper, ceramic tiles, pan masala, shaving creams, vacuum cleaner, deodorants etc come under the 28% GST Tax Slab.
- Services– Hotels with room tariffs more than Rs 7500, private run lotteries, 5-star hotels, race club, cinema complexes and other luxury products will attract a 28% GST.
The GST is more of a transparent system. This will gradually wipe out inflation and various provisions like compensation cess. It covers 29 states and 2 union territories and soon will be widely accepted and supported. Just like the demonetization policy, this will also come up in flying colors.
Want to know more about the Indian Taxation System and GST. Visit Here.