India GST Rates in 2017 - A Quick Guide
India GST Rates in 2017 - A Quick Guide
By: Vijay Sardana
For Updates,Follow on twitter: @vijaysardana
By: Vijay Sardana
For Updates,Follow on twitter: @vijaysardana
With the conclusion of the first day of the 14th round of the GST Council’s meet, GST is heading closer to timely implementation across the country.
The Council’s approval to over seven draft GST rules and fitment of over 1,211 commodities (with an exclusion of six items) in various tax slabs takes GST framework towards finality. With these announcements, India Inc now has sufficient information to realign its reporting systems and existing processes in line with GST requirements.
The list of exemptions appears to be substantially trimmed, as compared to the existing regime, with only seven per cent of total items indicated to be kept nil-rated under GST. While this would broaden the tax base under GST, some of the sectors may be introduced to tax compliances, which could be new to them. Though this might lead to teething troubles for these sectors, overall benefits are much to be rejoiced for. By bringing existing exempt sectors under the taxation net in GST would lead to availability of input tax credits, which can be used to offset output GST liability. This should create transparency in taxes that a consumer actually pays while buying an exempt product by way of hidden tax costs. Also, the tax credit chain would remain intact for these sectors.
While the rates for services are yet to be decided by the Council, services are expected to get dearer as the existing 15 per cent of service tax could go up to 18 per cent of GST. However, due to enhanced input tax credit base for service providers, the impact of incremental tax rate might get offset.
Overall, the announcements are on expected lines thus far. However, it would be crucial to keep track of item-wise GST rates schedules.
The GST Council, the apex decision-making body for the new tax, has fixed the tax framework under the Goods and Services Tax (GST) which is to be rolled out this July 1. Tax rates have been finalised for 1,211 items with a majority of items being kept under the 18 per cent slab.
Here's a complete list of GST rate card for common man:
Slab of Nil rate:
No tax will be imposed on items like 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 etc.
Slab of 5%:
Items such as fish fillet, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, stent, lifeboats will attract a tax of 5 percent.
Slab of 12%:
Frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth powder, agarbatti, colouring books, picture books, umbrella, sewing machine, and cellphones will be under 12 per cent tax slab.
Slab of 18%:
Most items are under this tax slab which include flavoured 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.
Slab of 28%:
Chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with chocolate, 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, and yachts will attract 28 per cent tax - the highest under GST slab.
What next:
This is essential for the businesses to realign their IT systems, undertake planning and formulate their pricing strategies in view of the transition to GST. The recent announcements have added credence to the government’s intention of rolling out GST by July 1.
Considering the limited time on hand, with the GST countdown drawing closer, industry must brace for the changes and gear up for the upcoming reform to ensure a smooth GST transition for their businesses.
The Council’s approval to over seven draft GST rules and fitment of over 1,211 commodities (with an exclusion of six items) in various tax slabs takes GST framework towards finality. With these announcements, India Inc now has sufficient information to realign its reporting systems and existing processes in line with GST requirements.
The list of exemptions appears to be substantially trimmed, as compared to the existing regime, with only seven per cent of total items indicated to be kept nil-rated under GST. While this would broaden the tax base under GST, some of the sectors may be introduced to tax compliances, which could be new to them. Though this might lead to teething troubles for these sectors, overall benefits are much to be rejoiced for. By bringing existing exempt sectors under the taxation net in GST would lead to availability of input tax credits, which can be used to offset output GST liability. This should create transparency in taxes that a consumer actually pays while buying an exempt product by way of hidden tax costs. Also, the tax credit chain would remain intact for these sectors.
While the rates for services are yet to be decided by the Council, services are expected to get dearer as the existing 15 per cent of service tax could go up to 18 per cent of GST. However, due to enhanced input tax credit base for service providers, the impact of incremental tax rate might get offset.
Overall, the announcements are on expected lines thus far. However, it would be crucial to keep track of item-wise GST rates schedules.
The GST Council, the apex decision-making body for the new tax, has fixed the tax framework under the Goods and Services Tax (GST) which is to be rolled out this July 1. Tax rates have been finalised for 1,211 items with a majority of items being kept under the 18 per cent slab.
Here's a complete list of GST rate card for common man:
Slab of Nil rate:
No tax will be imposed on items like 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 etc.
Slab of 5%:
Items such as fish fillet, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, stent, lifeboats will attract a tax of 5 percent.
Slab of 12%:
Frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth powder, agarbatti, colouring books, picture books, umbrella, sewing machine, and cellphones will be under 12 per cent tax slab.
Slab of 18%:
Most items are under this tax slab which include flavoured 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.
Slab of 28%:
Chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with chocolate, 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, and yachts will attract 28 per cent tax - the highest under GST slab.
What next:
This is essential for the businesses to realign their IT systems, undertake planning and formulate their pricing strategies in view of the transition to GST. The recent announcements have added credence to the government’s intention of rolling out GST by July 1.
Considering the limited time on hand, with the GST countdown drawing closer, industry must brace for the changes and gear up for the upcoming reform to ensure a smooth GST transition for their businesses.
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