GST Slab Rates 2023

5paisa Research Team Date: 25 Apr, 2023 01:22 PM IST

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Introduction

The Goods and Services Tax (GST) is an indirect tax system that was introduced in India in 2017 to simplify the taxation process and create a unified market across the country. Under the GST system, goods and services are taxed at different slab rates based on their category and nature. The GST Council, which is responsible for administering the GST, periodically reviews and revises these slab rates based on various economic and social factors. This article will provide an overview of the GST slab rates in 2023 and their implications for the Indian economy.

What Are The GST Rates In India 2023?

The GST rates in India in 2023 are categorized into four different GST slabs: 5%, 12%, 18%, and 28%. Goods and services are taxed at different rates based on their nature, category, and usage.

Here is a table listing the GST slabs for different categories in India in 2023:
 

Category

GST Rate

Dairy products, Unpacked food grains

0%

Essential goods

5%

Common use items

12%

Standard goods

18%

Luxury goods

28%

 

 

Classification Of Items Under The Several GST Rate Slabs

Here is a table listing the items under the several GST tax slabs in India:

Tax Rates

Products

0%

Milk, Eggs, Education Services, Curd, Health Services, Lassi, Children’s Drawing & Colouring Books, Unpacked Foodgrains, Unbranded Atta, Unpacked Paneer, Unbranded Maida, Gur, Unbranded Natural Honey, Fresh Vegetables, Palmyra Jaggery, Salt

5%

Sugar, Tea, Edible Oils, Domestic LPG, Roasted Coffee Beans, PDS Kerosene, Cashew Nuts, Footwear (< Rs.500), Milk Food for Babies, Apparels (< Rs.1000), Fabric, Coir Mats, Matting & Floor Covering, Spices, Agarbatti, Sweets, Life-saving drugs, Coffee (except instant)

12%

Butter, Ghee, Processed food, Almonds, Fruit Juice, Fruits, Nuts, Pickles, Chutney, Jam, Jelly, Packed Coconut Water

18%

Hair Oil, Toothpaste, Industrial Intermediaries, Soap, Ice-cream, Pasta, Toiletries, Corn Flakes, Soups, Computers, Printers

28%

Small cars (+1% or 3% cess), Luxury & sin items like BMWs, cigarettes and aerated drinks (+15% cess), High-end motorcycles (+15% cess)

 

Latest GST Rate Revision In The Council Meeting

The most recent GST Council meetings where the new Tax rates were revealed are listed below:

GST Rate Revision In 45th GST Council Meeting

On September 17th, 2021, the 45th GST Council meeting was held, during which various decisions were made regarding the GST rates.

Category

Old Rate

New Rate

Railway goods, locomotives, and parts

12%

18%

Metal concentrates and ores

5%

18%

Pens

12%

18%

Scrap and plastic waste

5%

18%

Renewable energy devices

5%

12%

Printed material

12%

18%

 

GST Rate Revision In 44th GST Council Meeting

On 12th June 2021, the 44th GST council meeting was held, and it took a few significant decisions concerning GST rates that are effective until 30th September 2021. The council had decided to exempt import duty and Integrated Goods and Services Tax (IGST) for Covid-related goods received from outside India as a gift from abroad for free distribution. The council also extended the reduced 5% GST rate on Covid-related essential items such as medical-grade oxygen, ventilators, Covid testing kits, and other related equipment until 30th September 2021.

Category

Old Rate

New Rate

Hand sanitizers

18%

5%

Testing kits

12%

5%

Equipment to check body temperature

18%

5%

Ambulances

28%

12%

 

GST Rate Revision In 43rd GST Council Meeting

Here are the details about the rate revision implemented in the 43rd GST Council meeting:

The government of India announced several measures to ease the burden of GST on the import and export of Covid-related relief goods. Firstly, the GST on the export of relief goods had been completely exempted until 31 August 2021. This meant that the exporters of such goods did not have to pay any GST on their exports. Additionally, GST on the import of certain medicines had also been placed under the exemption list, making it easier for importers to bring in essential medicines into the country.

Moreover, any Covid-related relief item that’s been imported with the intention of donating to the government or any relief organization was exempted from IGST (Integrated Goods and Services Tax) till 31 August 2021. This exemption applied to all kinds of relief items, including medical supplies, oxygen concentrators, and other equipment.

Furthermore, the government also announced an Amnesty Scheme to reduce the late fee returns for small taxpayers. Under this scheme, small taxpayers were allowed to file GST returns without any penalty or late fees, provided they filed their returns by the specified deadline. This initiative helped small taxpayers to comply with the GST regulations and avoid any penalties for late filing. Overall, these measures helped to ease the burden of GST on the import and export of Covid-related relief goods and provide some relief to small taxpayers.

GST Rate Revision In The 42nd GST Council Meeting

The 42nd GST Council Meeting was held on October 5, 2020, where various decisions were made. One of the key highlights of the meeting was the introduction of a new rule that allowed small taxpayers with a turnover of less than Rs. 5 Crore to file quarterly GSTR-3B and GSTR-1 forms. This new rule came into effect on 1 January 2021 and reduced the number of returns from 24 to 8.

Under this new rule, quarterly taxpayers were given the option of paying 35% of the net tax liability of the previous quarter, using an auto-generated challan for the first two months of the quarter. The auto-generation of GSTR-3B will be facilitated through a roadmap, where the details of the supplier’s GSTR-1 will help in auto-populating the Input Tax Credit (ITC). Taxpayers will be able to pay their GST through a simple challan.

Another significant decision made during the meeting was that taxpayers with a turnover of Rs.5 Crore and above will have to mention a 6-digit HSN code, while taxpayers with a turnover of less than Rs.5 Crore will have to mention a 4-digit HSN code.

Additionally, bank accounts linked with Aadhaar were allowed to receive refunds, encouraging greater ease of business for taxpayers.

The meeting also granted GST exemptions to ISRO, Antrix Corporation, and New Space India Limited (NSIL), which aimed to encourage space launching services in India. Sanitizers that are non-alcoholic continued to be taxed at 18% GST.

Furthermore, the council stated that the compensation cess collected until the date of the meeting amounted to Rs. 20,000 Crore, which was disbursed to specific states in India by 5 October 2020.

GST Rate Revision In The 41st GST Council Meeting

The 41st GST Council Meeting was held on 27 August 2020, and several important decisions were taken regarding the GST rates. Here are the highlights:

1.    The Council announced an extension of the GST compensation cess levy beyond 2022, which was initially meant to expire in June 2022. The GST Council will work on the modalities of the extension and the specific time frame for the same.

2.    The Council deferred a decision on reducing the GST rates on Covid-related goods such as medical equipment, masks, and sanitizers until the next meeting.

3.    The late fee for filing GSTR-1 for small taxpayers with a turnover of up to Rs. 1.5 Crore was waived off until September 2020. The same for taxpayers with a turnover of more than Rs.1.5 Crore was capped at Rs. 500 per return.

4.    The GST rate on hand sanitizers was reduced from 18% to 12% until 31 December 2020.

5.    The GST on all the items sold by the Khadi and Village Industries Commission (KVIC) was exempted. KVIC is a statutory body established by the Indian government to promote and develop khadi and village industries in rural areas.

6.    The GST on all the items sold by the National Handloom Development Corporation (NHDC) was also exempted. NHDC is a public sector undertaking established by the Indian government to promote and develop the handloom industry.

7.    The GST Council also recommended a reduction in the GST rates on various goods and services such as fertilizers, tractors, and insurance, which would be taken up in the next meeting.

 

Conclusion

The GST rate slabs play a crucial role in determining the taxability of goods and services in India. The GST Council periodically revises these rates to ensure that they align with the changing economic needs of the country. The latest revisions have been focused on providing relief to small taxpayers and boosting economic growth. It is important for businesses and individuals to stay updated on the latest GST rate revisions to ensure compliance with the law and avoid any penalties.

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Frequently Asked Questions

The three types of GST (Goods and Services Tax) implemented in India are Central Goods and Services Tax (CGST),

State Goods and Services Tax (SGST), and Integrated Goods and Services Tax (IGST). 
●    CGST is levied by the Central Government on intra-state supplies of goods and services. 
●    SGST is imposed by the State Government on intra-state supplies of goods and services.
●    IGST is charged on inter-state supplies of goods and services by the Central Government, which is later divided between the Central and State Governments based on the destination of goods and services. 

These three taxes replaced several indirect taxes such as VAT, service tax, and excise duty, leading to a simplified tax system.
 

The GST rate on gold is 3%. This includes gold bars, gold coins, and gold jewelry.

The GST rate applicable on mobile phones in India is 18%. This rate was implemented on 1st April 2020, after the GST Council had increased the GST rate from the previous rate of 12%.

The GST rates applicable on goods and services are divided into 5 tax slabs:

●    0% GST: Exempted items like fresh fruits and vegetables, unprocessed food, books, and newspapers.
●    5% GST: Goods like clothes, footwear, packaged food items, and some services like transportation of goods and hotels charging a room rent of less than Rs. 1000 per day.
●    12% GST: Processed food items, medicines, computers, and some services like business class air travel and telecom services.
●    18% GST: Most goods and services fall under this slab including luxury items, electronics, and some services like AC hotels serving liquor and IT services.
●    28% GST: Luxury goods like cars, aerated drinks, cigarettes, and services like 5-star hotels, race club betting, and movie tickets cost over Rs. 100.
 

The GST Council, consisting of the finance ministers of the central and state governments of India, is responsible for deciding the GST slab rates. The council meets periodically to discuss and decide on GST-related matters, including the rates for goods and services. The council considers various factors, such as revenue implications, industry feedback, and the impact on consumers, before deciding on the rates.