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GST Rates for GOODS and SERVICES

Category : | Author :MasterGST

The Goods and Services Tax (GST) has been one of the key things that has caught the attention of the market given its implications on earnings of companies. GST council has made the much-awaited announcements around tax rates on various categories of goods on day one of a two-day meeting of the said council at Srinagar. There has been a hype around these rates for a while and now these rates are finally in the public domain.

A number of products and services would become cheaper and others would become heavier on the wallet. Under GST, all goods and services transacted in India are classified under the HSN code system or SAC Code system. Goods are classified under HSN Code and services are classified under SAC Code. Based on the HSN or SAC code, GST rates have been fixed in five slabs, namely NIL, 5%, 12%, 18% and 28%.

The justification behind this multi-tier system is that essential goods and services cannot be taxed at the same rate as luxury products and services. The government has kept a large number of items under 18% tax slab. The government categorized 1211 items under various tax slabs. Gold and rough diamonds do not fall under the current rate slab ambit and will be taxed at 3% and 0.25% respectively.

HSN code or Harmonized System Nomenclature code number is an internationally adopted commodity description and coding system developed by the World Customs Organization (WCO). HSN code is used by more than 200 countries as a basis for their customs tariffs. Currently over 98 % of the merchandise in international trade is classified under HSN code With the HSN code acting as an universal classification for goods, the Indian Government has decided to adopt the use of HSN code for classification of goods under GST and levy of GST.

The HSN Code 2017 Edition is the current valid version applied in international trade transactions. Prior to the implementation of the HSN Code- 2017 Edition, HSN Code – 2012 Edition was applied in all international trade transactions. The HSN Codes are first classified into sections, chapters, contains the six-digit codes of the Harmonized System. To look up a HSN code you can use the HSN code finder or drill-down from Section to Chapter to the HSN Code.

 

GST Tax Rate in India:

Here is a low-down on the tax slab these items would attract:

Percentage of TAX (%) GOODS SERVICE
Nil (0%) 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 Hotels and lodges with tariff below Rs 1,000, Grandfathering service has been exempted under GST. Rough precious and semi-precious stones will attract GST rate of 0.25 per cent.
5% Edible oil, sugar, spices, tea, coffee (except instant), Mishti/Mithai (Indian Sweets), fish fillet, Apparel below Rs 1000, packaged food items, footwear below Rs 500, cream, skimmed milk powder, branded paneer, frozen vegetables, 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 Transport services (Railways, air transport), small restraurants will be under the 5% category because their main input is petroleum, which is outside GST ambit
12% Computers, Apparel above Rs 1000, frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth powder, agarbatti, coloring books, picture books, umbrella, sewing machine, cell phones, Ketchup & Sauces, All diagnostic kits and reagents, Exercise books and note books, Spoons, forks, ladies, skimmers, cake servers, fish knives, tongs, Spectacles, corrective, Playing cards, chess board, carom board and other board like ludo. State-run lotteries, Non-AC hotels, business class air ticket, fertilisers, Work Contracts will fall under 12 per cent GST tax slab
18% Hair oil, toothpaste and soaps (currently at 28%)

Capital goods and industrial intermediaries (big boost to local industries) footwear costing more than Rs 500, Bidi Patta, Biscuits (All categories), flavored 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 and monitors, Kajal pencil sticks, Headgear and parts thereof, Aluminium 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

AC hotels that serve liquor, telecom services, IT services, branded garments and financial services will attract 18 per cent tax under GST, Room tariffs between Rs 2,500 and Rs 7,500, Restaurants inside five-star hotels
28% Small cars (+1% or 3% cess) Luxury & sin items like BMWs, cigarettes and aerated drinks (+15% cess)

High-end motorcycles (+15% cess), Bidis, chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with choclate, 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, will attract 28 % tax – the highest under GST system.

Private-run lotteries authorised by the states, hotels with room tariffs above Rs 7,500, 5-star hotels, race club betting, cinema will attract tax 28 per cent tax slab under GST.

Coal to be taxed at 5 percent against current 11.69 per cent. This will prove beneficial for the power sector and heavy industries which rely on coal supply. This will also help curb inflation. Expect a good run for Coal India tomorrow.

Toothpaste, hair oil, and soaps will all be taxed at 18 percent, where currently they are taxed at 28 percent. Most of the cosmetics and fast moving consumer goods (FMCG) brands should get the benefit of this tax reduction. After all, Fair and Lovely might seem fairer in its pricing from now on!

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ABOUT-GST How is MasterGST helpful?

Category : | Author : MasterGST

Goods and Service Tax is being glorified as a system of taxation by which economy will take an upward swing and further it will ease the trade and industry with respect to the indirect tax system of the country. “Only one” indirect tax has to be paid by the trade industry and all the other indirect taxes will be subsumed in GST. It presents India as a unified market to business owners and also aims at bringing a lot of black money back into the mainstream economy.

WHAT IS GST?
GST is abbreviated as “GOODS and SERVICE TAX”. The Goods and Services Tax or GST is scheduled to be launched on the 1st of July, and it is set to revolutionize the way we do our taxes.
GST is a consumption based tax levied on sale, manufacture and consumption on goods & services at a national level. This tax will be substitute for all indirect tax levied by State and Central government. Exports and direct tax like income tax, corporate tax and capital gain tax will not be affected by GST. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.
It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-State supply of goods and / or services would be called the Central GST (CGST) and that to be levied by the State GST (SGST) which will be levied by State. Similarly Integrated GST (IGST) will be levied by and administered by Centre on every inter-state supply of goods and services.
Now, Goods and Services Tax will be levied at every point of sale. Assume that the entire manufacture process is happening in Rajasthan and the final point of sale is in Karnataka. Since Goods & Services Tax is levied at the point of consumption, so the state of Rajasthan will get revenue in the manufacturing and warehousing stages, but lose out on the revenue when the product moves out Rajasthan and reaches the end consumer in Karnataka. This means that Karnataka will earn that revenue on the final sale, because it is a destination-based tax and this revenue will be collected at the final point of sale/destination which is Karnataka.

HOW DOES IT WORKS?
GST would apply to all goods other than crude petroleum, motor spirit, diesel, aviation turbine fuel and natural gas. It would apply to all services barring a few to be specified. With the increase of international trade in services, GST has become a global standard.
When you buy supplies for your business, you’ll be charged 10% in GST which you can claim back as a credit. At the end of each GST period – usually quarterly but occasionally monthly – you need to account for the GST you’ve collected on your sales minus any that you’ve paid (the credits) on your purchases. The difference is the amount payable (or refundable if credits on purchases exceed debits on sales).
A nationwide tax reform cannot function without strict guidelines and provisions. The GST Council has devised a fool proof method of implementing this new tax regime by dividing it into three categories.
When Goods and Services Tax is implemented, there will be 3 kinds of applicable Goods and Services Taxes:
CGST: where the revenue will be collected by the central government.
SGST: where the revenue will be collected by the state governments for intra-state sales.
IGST: where the revenue will be collected by the central government for inter-state sales.

In most cases, the tax structure under the new regime will be as follows:
Transaction New Regime Old Regime Comments

Transaction New Regime Old Regime Comments
Sale within the state CGST + SGST VAT + Central Excise/Service tax Revenue will now be shared between the Centre and the State
Sale to another State IGST Central Sales Tax + Excise/Service Tax There will only be one type of tax (central) now in case of inter-state sales.

GST under supply of goods and services takes place in Union Territories is called UTGST. The Union territory tax is levied on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption.

The Union territory tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

Therefore, technically SGST cannot be levied in a Union Territory without legislature. This applies to the following Union Territories of India:

(i) the Andaman and Nicobar Islands;
(ii) Lakshadweep;
(iii) Dadra and Nagar Haveli;
(iv) Daman and Diu;
(v)  Chandigarh; or
(vi) other territory.

The amount of input tax credit available in the electronic credit ledger of the registered person on account of—

(a) integrated tax shall first be utilized towards payment of integrated tax and the amount remaining, if any, may be utilized towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order.

(b) the Union territory tax shall first be utilized towards payment of Union territory tax and the amount remaining, if any, may be utilized towards payment of integrated tax.

(c) the Union territory tax shall not be utilized towards payment of central tax.

It is quite obvious that post approval from the GST Council, the Central Government shall forward the UTGST Law in the Parliament. Once approved by the Parliament, there could be the following combination of taxes applicable for any transaction:

  1. For Supply of goods and/or services within a state (Intra-State): CGST + SGST;
  2. For Supply of goods and/or services within Union Territories (Intra-UT): CGST + UTGST;
  3. For Supply of goods and/or services across States and/or Union Territories (Inter-State/ Inter-UT): IGST

Order of utilization of Input Tax Credit of UTGST would be the same like SGST. This means, Input Tax Credit of SGST or UTGST would first set-off against SGST or UTGST respectively. Output Tax liabilities and balance, if any, can be set-off against IGST Output Tax liabilities.

DOES MY BUSINESS NEED TO REGISTER TO GST?
Any business with taxable supply turnover over Rs.25 lakhs would be registered for GST. There is also a mechanism available for voluntary registration for GST to help claim input tax credit. GST registration must be obtained within 30 days of exceeding Rs.25 lakhs turnover limit. GST registration would be online through a portal maintained by Central or State. The GST registration would be provided based on PAN.
If you are running your business in India, its important for you to become GST compliant. As a business owner, it’s your responsibility to register for GST.

WE THE MASTER GST?
We are the Govt. licensed GST Suvidha Provider. You can simply register to GST by clicking on our website link http://app.mastergst.com/signupall .

For new businesses and startups, it becomes impossible to navigate through various direct and indirect taxes. Constant changes to taxes like Service Tax are making things even worst. But now, the things are set to change with new Goods and Service tax – commonly known as GST.
You can register for GST via our Business Portal MasterGST. You do this by going to our website www.mastergst.com or just by clicking on this link http://app.mastergst.com/signupall help you to sign up.

MasterGST- The easiest way to Pay and Manage Goods and Service TAX (GST). We are a GST compliance solution from TeraSoft (GST licensed GSP provider) will cater to a range of business and be the technology partner in implementing the GST Solution. We have excellent features and some of them are:

  • Gateway to process GST transaction.
  • Technology platform using Cloud technology.
  • Robust and Secure.
  • Pay per transaction volume.
  • Added features for reconciliation and conflict resolution.
  • Simple and user friendly web enabled platform.
  • API platform for ASPs / Application Developer.

MasterGST is mainly used by CAs, TAX Practitioners, TAX Consultants, Business and Enterprises, Business and Technology Partners, Franchise and Marketing Partners, APIs Developer Community. To make it simple all can use MasterGST with is easy to work and understand.
As an ASP (Application Service Provider)- MasterGST will enable the CAs and Tax Professionals with the right technology and operational features to file GST returns for the clients.

Why MasterGST ? MasterGST many good features like Credential, Technology, Pricing, Secure and Robust. MasterGST provides the solutions like MASTERGST GSP Solution and MASTERGST ASP Solution. So, that Paying TAX and filing the returns are made easy by MasterGST.
Credential-Proven track record to handle Tax & Regulatory Eco system at TeraSoft. Implementating lot of Govt. Projects from past 21 years like AADHAR, PDS, AP Fiber.
Technology-Cloud enable, Secure APIs. Fast Integration with ERPs with Built in Templates.
Secure and Robust-Highly Secure -AD5 and SALT Ecnrypted. MPLS Connected. High Availability.
Pricing-Consumer Edition, CAs/Practitioners, Small and Medium Business, Enterprises, ASPs.

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