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GST Rates in 2024: A Comprehensive Guide
GST or the Goods and Services Tax was launched in 2017 to bring uniformity in the tax structure in India as it was complicated for the general population, businesses, and the government. The aim was to enhance trust and transparency between customers and sellers.
Each of the GST slabs comprises different categories of items according to particular parameters. The GST Council determines these rate slabs and revises them from time to time. Typically, the GST rates for essential needs are lower than those for luxury supplies. In this comprehensive guide, we will shed light on the GST rates to be implemented in 2024.
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Understanding the Types of GST Rates
GST rates are the percentage rates of goods and services tax under the CGST, SGST, and IGST Acts. Let us explain each type of GST:
Central Goods and Services Tax (CGST)
CGST applies to the goods and services considered to be standard, with the revenue collected allocated to the central government. Tax rates on them can be amended periodically. According to the Central Goods and Services Tax Act 2016, this part of the GST includes most of the central taxations such as Central Excise Duty, Central Sales Tax, Service Tax, and Additional Custom Duty.
State Goods and Services Tax (SGST)
SGST comprises taxation and levies under the state authority as a part of one uniform taxation structure. It includes State Sales Tax, Entertainment Tax, Luxury Tax, and Levies on Lottery. The revenue from these taxes goes to the state government.
Integrated Goods and Services Tax (IGST)
IGST is applicable to the goods and services transferred from one state to another. According to Article 269A of the Indian Constitution, IGST is for the inter-state trade and commerce activities involving the movement of commodities. The revenue from these taxes goes to the Government of India.
A business registered under the GST law has to include the GST amounts charged on the value items supplied in its invoices. The GST rates in CGST and SGST are nearly the same, while IGST is approximately the sum of CGST and SGST rates.
Structure of GST Rates in India
The primary GST slab for the regular Indian taxpayers are currently 0%, 5%, 12%, 18% & 28%. Additionally, there are a few lesser-used slabs like 0.25% and 3%. At the same time, the composition-taxable persons need to pay at lower rates like 1.5%, 5%, or 6% on their turnover. These are the businesses having annual turnover up to Rs. 1 crore and opting for a composition scheme. However, service providers cannot opt for this scheme. Here are the rates applicable to businesses under this scheme:
Business | CGST | SGST | Total |
|---|---|---|---|
Manufacturing and Trading | 0.5% | 0.5% | 1.0% |
Restaurants (not serving alcohol) | 2.5% | 2.5% | 5% |
The GST rates are multiplied by the assessable value of the supply to calculate its amounts in a tax invoice. Besides these taxes, the GST law levies cess on the sale of some items like tobacco, cigarettes, petrol, aerated water, and motor vehicles, with rates ranging from 1% to 204%.
The following rate table shows the GST rate structure for commonly used consumable products.
GST on goods
Tax Rate Slab | Products |
|---|---|
0% | Milk, curd, lassi, unpacked paneer, unbranded atta, unbranded maida, unpacked foodgrains, besan, prasad, eggs, kajal, child drawing and colouring book, unbranded natural honey, jaggery, salt, fresh vegetable, phool wali jhadu |
5% | Household items like sugar, tea, spices, edible oil, skimmed milk powder, milk food for babies, coffee, roasted coffee beans, packed paneer, raisin, domestic LPG, coal, PDS kerosene, cashew nuts, apparel up to 1000, fabric, footwear upto 500, matting and floor covering, Indian sweets, agarbatti, and Life-saving drugs |
12% | Computers, mobile, umbrella, butter, ghee, almonds, processed food items, fruit juice, Packed coconut water, preparation of fruits, vegetables, nuts and other parts of plants such as pickle, jam, murabba, chutney, etc. |
18% | Personal Care products such as soaps, hair oil, toothpaste, toiletries capital goods and industrial intermediaries, pasta, cornflakes, soups, ice creams |
28% | Small cars, luxury cars like BMWs, high-end motorcycles(+15% cess), consumer durables like ACs and refrigerators, cigarettes and aerated drinks (+15% cess) (beedies are not included) etc. |
GST on services
Tax Slab Rate | Services |
|---|---|
0% | Health services, education services |
5% | Railways-transportation of passengers, goods, transportation of goods in a vessel from outside India, transport by air (scheduled) or air travel for pilgrimage via chartered or non-scheduled flights, leasing of aircraft, renting a cab (without fuel cost), transport services in AC contract, stage or radio taxi, tour operator services, the printing of newspapers, print media ad space |
12% | Air travel excluding economy, transportation of goods through rail from a third party besides Indian Railways, food and drinks at restaurants without AC or heating or liquor license, accommodation rental exceeding Rs.1000 but less than Rs.2500 daily, construction of buildings for the purpose of sale, chit fund services by foremen, Movie Tickets less than or equal to Rs. 100, IP rights on a temporary basis, |
18% | Food or drinks at restaurants with AC/heating, food or drinks at restaurants with a liquor license, outdoor catering, supply of food, shamiyana, and party arrangement, accommodation rental exceeding Rs.2500 and less than Rs.5000 per day, circus, folk, theatre, drama, Indian classical, Movie Tickets which exceeds Rs. 100, supply of works contract |
28% | Entertainment events such as theme parks, joy rides, amusement facilities, water parks, merry-go-rounds, ballet, go-karting, race courses, casinos, Race club services, gambling, sporting events like IPL, food/drinks at AC 5-star hotels, 5-star hotels, or above accommodation |
Exemptions from GST
Besides the good and services taxed on the aforementioned rates under the GST Act, there are some exemptions from GST. Here are the lists of goods and services exempted from GST.
List of Exempted Goods
Sector | Description of Goods |
|---|---|
Animals | Fish fresh or chilled, live fish, prawn/shrimp seeds, sheep and goats, mammals, goods other than live horses, products of animal origin (not specified elsewhere), insects, birds |
Meat | Sheep and goat meat, meat of Bovine animals (fresh and chilled), meat of horses, asses, mules (fresh and chilled), pig fat, free of lean meat |
Milk products, eggs, and honey | Fresh milk, cream, curd, chena and paneer( other than bearing a registered brand name), lassi, buttermilk, bird eggs in the shell (fresh, preserved, and cooked), natural honey(other than a product with a registered brand name) |
Non-edible animal products | Human hair(unworked), waste of human hair, hoof meal, horn meal claws, semen including frozen semen |
Live trees and plants | Live trees and other plants, cut flowers, and bulb roots |
Vegetables | Tomatoes, potatoes, sweet potato (fresh and chilled), onion, garlic, cucumbers, cabbage, cauliflower, carrots, turnips, chicory, salad beetroot, radish |
Fruits and dry fruits | Coconuts (fresh and dried), bananas, pineapple, mangoes, oranges, limes, grapes, avocados, guavas, melons, apples, pears, cherries, apricots, other fruits such as kiwi fruits, strawberries, blackberry, Brazil nuts, almonds, hazelnuts, dates, walnuts, chestnuts |
Tea, coffee, spices | Unprocessed green leaves, coffee beans( not roasted), ginger (other than processed form), fresh turmeric( other than processed form) |
Edible grains | Wheat and meslin, maize, rice, oats, grain sorghum, jawar, bajara, ragi, buckwheat and canary seeds, barley (other than those in a container and having a registered brand name) |
Milling industry products | Wheat flour, flour of potato, Guar meal, cereal flour other than of wheat or meslin |
Oil seeds, fruits and parts of plants | All goods of seed quality, ground nuts, soya beans (whether or not broken), linseed, sunflower seed, rape or colza seed, melon seeds, other oil seed (cotton seeds, palm nuts and kernels, castor oils) |
Vegetable material and product | Vegetable material used primarily for plaiting, Betel leaves, unworked coconut shells, vegetable material for manufacturing of broomstick |
Jaggery | Jaggery of all kinds (including cane jaggery) |
Pizza, pasta, cake, bread | Beaten rice, puffed rice(muri), papped, bread |
Tea and coffee extract and essence | Prasadam supplied by religious places such as temples, gurudwaras, mosques, churches |
Water, mineral | Water (other than aerated, purified, mineralized, mineral), neera, non-alcoholic toddy |
Salts and sands | Salts of any types |
Drugs and pharmaceuticals | Human blood and its componen |
Fertilizer | All goods and organic manure |
Silkworm cocoon, yarn, waste | Silkworm laying, raw silk, silk waste, cocoon, khadi fabric |
Wool material and waste | Wool (not carded or combed), fine or coarse animal hair, waste of wool or fine or coarse animal hair |
List of Exempted Services
Name of Sector | Services Exempt |
|---|---|
Senior Citizens | The administrative fee collected by the National Pension System Trust.
Services provided by old age homes run by state or central government of value up to Rs. 25000 to citizens over 60.
Services provided by coal mines provident fund organisation to PF subscribers.
Services provided by an unincorporated or non-profit entity registered under law to have members with membership fees of up to Rs. 1000. |
Farmers/Agriculture | Services provided by FSSAI to food businesses.
Services for warehousing minor forest producing.
Services by artificial insemination of livestock (except horses).
Services for extending the electricity distribution network for agricultural use provided by the installation and commissioning by DISCOMS. |
Banking/Finance | Re-insurance services provided to insurance schemes like Pradhan Mantri Rashtriya Swasthya Suraksha Mission |
Government | Services provided by the government to ERCC by assigning the right to collect to mining leaseholders.
Guarantees given by the central and state government to their undertakings/PSUs. |
Miscellaneous | GST applied on the actual rate instead of the declared tariff for hotel services.
Import of services by UN or foreign diplomatic missions or other international organizations. |
GST Rates in India in 2024
GST rates will witness some key changes in 2024, with new rates passed during the last week of 2022. Further, rates are revised during the GST Council meetings from time to time. The objective of these changes is to correct the prevailing inverted tax structure and provide for revenue augmentation. We will now summarise the details of changes to GST rates leading to the new GST rates in 2024.
Highlights of GST Revisions
52nd GST Council Meeting
The 52nd GST Council meeting held on 7th October 2023 laid down the following recommendations:
-
A GST Amnesty Scheme will extend the filing time for appeals till 31 January 2024 against the three-month period for all the orders passed up to March 2023. 12.5 % pre-deposit of tax is required, with 2.5% paid in cash.
-
No GST will be charged on a personal guarantee by directors to the bank against loans and credit limits sanctioned to the company.
-
CGST Section 159 will be amended, with the automatic restoration of provisionally attached property after one year.
-
States will have the authority to tax Extra Neutral Alcohol (ENA) used in production of alcoholic beverages for human consumption.
-
The taxable value of a corporate guarantee between a holding company and its subsidiary is the real compensation or 1% of the guaranteed amount offered.
Highlights of the 51st GST Council Meeting
The highlights of the 51st GST Council Meeting held on 2nd August 2023 are as follows:
-
The valuation of the supply of online gaming and actionable claims in casinos will be done according to the amount deposited/ paid/ payable to the supplier by the player instead of the overall value of a single bet.
-
No changes in the 28% GST on the face value, irrespective of whether it is a game of skill.
-
The IGST Act, 2017 (which includes Schedule III of the CGST Act 2017) and the CGST Act, 2017 will provide clarity on the tax on the supplies in casinos, online gaming, and horse racing.
-
The CGST Rules, 2017 will not be amended to include specific provisions for the valuation of online gaming supply and the supply of actionable clams in casinos.
Revision of GST Rates in the 50th GST Council Meeting
Here are the highlights of the 50th GST Council Meeting held on 11th July 2023:
Item | Old Rate | New Rate |
|---|---|---|
Food and beverages in cinema halls | 18% | 5% |
Uncooked, unfried, and extruded snack palettes | 18% | 5% |
Food for Special Medical Purposes (FSMP) | - | Exempt |
Cancer-related medicine | - | Exempt |
Medicines for rare diseases | - | Exempt |
Imitation zari thread or yarn | 12% | 5% |
LD Slag | 18% | 5% |
Fish soluble paste | 18% | 5% |
Casinos, online gaming, and horse racing | 18% | 28% |
Revision of GST Rates in the 49th GST Council Meeting
The 49th GST Council Meeting held on 18 February 2023 had the following revisions:
Item | Old Rate | New Rate |
|---|---|---|
Rab/Liquid jaggery | 18% | Nil (sold loose) / 5% (sold labelled/pre-packaged) |
Pencil sharpeners | 18% | 12% |
Certain tracking devices fixed on durable containers | Applicable rate | Nil |
Authority, board, or a body set up by the Central or State Government including the National Testing Agency (NTA) for conducting entrance examination | Applicable rate | Exempt |
Coal rejects supplied to the washeries | Applicable cess rate | Exempt from cess |
Revision of GST Rates in the 48th GST Council Meeting
The following changes were made during the 48th GST Council meeting held on 17th December 2022:
Item | Old Rate | New Rate |
|---|---|---|
Ethyl alcohol sold to refineries to blend with motor spirit or petrol | 18% | 5% |
Husk of pulses, chilka and concentrates, chuni or churi, and khanda for cattle feed | 5% | Nil |
Sale of Mentha arvensis, similar to Mentha oil | No RCM | Under RCM |
Exceptional Cases in GST
Besides GST on business goods and services, there are a few exceptional cases you should know about.
GST on Loans
When taking loans from banks, GST is levied on the processing charges and other charges (loan prepayment charges) excluding the principal and interest payment.
Loan Type | GST Rate |
Personal Loan | 18% |
Car Loan | 18% |
Home Loan | 18% |
GST on Real Estate
GST rates vary for different building materials used in the construction process. For example, sand, rubble, marble, etc are taxable at 5% and cement at 28%. GST is applicable to real estate purchases bought as an under-construction property. No GST rates are applicable on a ready-to-move property.
GST on Cars
The GST rate on cars is 28% for all personal use vehicles, whether with a petrol or diesel-driven engine. A composition cess is also applicable to cars, taking the overall tax rate from 29% to 50%. However, lower rates apply to cars using sustainable technologies such as electric vehicles.
GST on Gold
The GST rate on jewellery is 3%, while 5% GST is applicable for making charges. This is usually charged as input tax credits by the jeweller. The GST charge applied to the final bill is 3%.
Conclusion
GST has truly stood out as a landmark tax reform, with a positive impact on several industries. The revisions in GST mandates seek to improve the overall tax system in India. Regular GST Council meetings bring in relevant reformation helpful to different types of industries. Additionally, the GST tax slabs ensure that minimum tax is levied on basic products and services so that the general population is not burdened.
Frequently asked questions
Q
What are the benefits of GST?
A
GST unifies the tax structure in India and eases the process of tax exemption. The process of administration is easier for the Central and State Governments and it controls leakage. Additionally, it enhances the efficiency of the revenue system. Further, compliance has become easier and more transparent for industries and businesses. Manufacturers and exporters can gain more as the overall cost of production has decreased. General consumers also get relief from several other tax burdens with a single tax ending hassles for them.
Q
What are the different GST rate slabs?
A
In total, 1300 goods and 500 services are put into different tax slabs of 5%, 12%, 18% and 28%. This list does not include gold and special/semi-precious stones as they are taxed at the rate of 3% and 0.25% under GST respectively. Generally, essential items are placed in lower slabs while luxury items are placed in higher slabs.
Q
How is the GST on a product calculated?
A
The amount charged as GST is calculated as a percentage of the price of the product. It is added to the selling price for the total amount. GST can be calculated by checking the list of tax slabs to identify the rates on different products.
Q
What are HSN wise GST rates?
A
Harmonized System of Nomenclature code (HSN Code) is a system of coding used to classify goods under GST in India. The codes are issued by the World Customs Organization (WCO) and help with the classification of commodities that belong to the same nature under different chapters, sections, headings, and sub-headings.
Q
Which services cost nil GST tax?
A
Nil GST tax is applicable to services offered on Basic Savings Bank Deposit (BSBD) opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY). Additionally, some services and goods counted under the most basic needs cost nil GST tax.
Prachi Jain
Chartered Accountant
Prachi Jain is a Chartered Accountant with a passion for simplifying finance and tax-related matters through her insightful and informative blogs. With a background in finance and a deep understanding of tax regulations, Prachi has established herself as a trusted source of financial wisdom. Prachi is committed to empowering her readers with the knowledge they need to make informed financial decisions. Her expertise and dedication shine through in every blog post, helping her audience navigate the intricacies of finance and taxes with confidence. Follow Prachi Jain's blog for practical insights and guidance on managing your finances effectively.
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