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CONCEPT – GST SLAB RATES 2019
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- Logic of GST slabs : The essential services and food items were placed in the lower tax brackets, while luxury services and products have been placed in the higher tax bracket. Seventeen types of taxes and 26 types of cess of Centre and States together were subsumed into the GST (when it was launched in July 2017) and any additional revenue measure is permissible only after the GST Council’s nod.
- Fitting in the pieces : The GST council fitted over 1300 goods and 500 services under four tax slabs of 5%, 12%, 18% and 28% under GST. This is aside the tax on gold that is kept at 3% and rough precious and semi-precious stones that are placed at a special rate of 0.25% under GST. So, a total of six slabs exist directly, plus the zero percent slab. And then there is the Kerala special cess slab. So, a total of 8 slabs exist. Worldwide, GST systems have 2 or 3 slabs at the most.
- How many, where : A total of 81% of all the goods and services fall below or in the 18% tax slab. This means 7% of the items come under the exempted list, 14% of the items attract a 5% tax, 17% of the items attract a 12% tax, and 43% of the items attract an 18 % tax slab, while only 19% of the items fall under the highest slab of 28% in the new regime.
- Exempted GST Rate Slab (No Tax) : 7% goods and services fall under this category. Some of these that are of regular consumption include fresh fruits and vegetables, milk, butter milk, curd, natural honey, flour, besan, bread, all kinds of salt, jaggery, hulled cereal grains, fresh meat, fish, chicken, eggs, along with bindi, sindoor, kajal, bangles, drawing and coloring books, stamps, judicial papers, printed books, newspapers, jute and handloom, hotels and lodges with tariff below INR 1000 and so on.
- 5% GST Rate Slab : 14% goods and services fall under this category. Some of these include apparel below INR 1000 and footwear below INR 500, packaged food items, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, cashew nut, cashew nut in shell, raisin, ice, fish fillet, kerosene, coal, medicine, agarbatti (incense sticks), postage or revenue stamps, fertilizers, rail and economy class air tickets, small restaurants, and so on.
- 12% GST Rate Slab : Edibles like frozen meat products, butter, cheese, ghee, dry fruits in packaged form, animal fat, sausages, fruit juices, namkeen, ketchup & sauces, ayurvedic medicines, all diagnostic kits and reagents, cellphones, spoons, forks, tooth powder, umbrella, sewing machine, spectacles, indoor games like playing cards, chess board, carom board, ludo, apparels above INR 1000, non-AC restaurants, business class air ticket, state-run lottery, work contracts and so on attract a 12% GST. 17% of goods and services fall under this category.
- 18% GST Rate Slab : 43% of goods and services fall under this category. Pasta, biscuits, cornflakes, pastries and cakes, preserved vegetables, jams, soups, ice cream, mayonnaise, mixed condiments and seasonings, mineral water, footwear costing more than INR 500, camera, speakers, monitors, printers, electrical transformer, optical fiber, tissues, sanitary napkins, notebooks, steel products, headgear and its parts, aluminum foil, bamboo furniture, AC restaurants that serve liquor, restaurants in five-star and luxury hotels, telecom services, IT services, branded garments and financial services and so on attract an 18% GST.
- 28% GST Rate Slab : 19% of goods and services fall under this category. The rest of edibles like chewing gum, bidi, molasses, chocolate not containing cocoa, waffles and wafers coated with chocolate, pan masala, aerated water, personal care items like deodorants, shaving creams, after shave, hair shampoo, dye, sunscreen, paint, water heater, dishwasher, weighing machine, washing machine, vacuum cleaner, automobiles, motorcycles, 5-star hotel stays, race club betting, private lottery and movie tickets above INR 100 etc. have been clubbed together under the 28% GST slab.
- Some other items that got costlier : Courier services, mobile phone tariffs, Mobile bills, tuition fees, salon visits, insurance premiums, banking charges, broadband services got costlier by 3%. These were earlier charged a 15% service tax, and now fall under 18% tax slab. Taxes on aerated drinks, tobacco and luxury goods now come under the 28 percent tax bracket under GST, so are costlier. Real Estate also got expensive as it attracts a GST of 12% as opposed to 6%.
- Kerala calamaity cess : Dealing a blow to the "One Nation One Tax" concept, Kerala became the first State to impose calamity cess after the introduction of Goods and Services Tax (GST). This will mean buying various goods will become costlier and services such as staying in a hotel will get expensive. The GST Council approved levy of cess on intra-State supply of goods and services within the State of Kerala at a rate not exceeding one per cent for a period not exceeding 2 years.
- Under which law : Following a Constitutional amendment, sub-section (4) (F) of the newly inserted article 279 A prescribes: “Any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster.” Similarly, the schedule of the Goods and Services Tax (Compensation to States) Act, 2017, provides for the imposition of cess up to the rate of 15 per cent ad valorem on “any other supplies”. After a devastating flood in 2018, Kerala approached the GST Council to levy cess to meet the cost of rehabilitation and reconstruction.
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