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What is GST? Know Important Fact about Goods and Services Tax Law

Date 23-Jun-2017
Subject What is GST? Know Important Fact about Goods and Services Tax Law

The Goods and Service Tax (GST) is a single consolidated indirect tax which is all set to be launched on July 1, 2017 to remove tax barriers between states and create a single market. It has been finalized and introduced by GST council headed by Arun Jaitley who is the finance minister of India.

It will work as a single tax and absorb all other indirect taxes including central excise duty, services tax, additional customs duty, surcharges, state-level value added tax (VAT). It is going to be imposed on all transactions happen during the entire manufacturing chain such as sale, transfer, purchase, barter, lease, or import of goods and/or services.

There are total four tax slabs in which almost all goods and services have been listed i.e. 5%, 12%, 18% and 28%.However, there are some Goods and Services which fall under the category of Tax exempted products such as-

·        Food items- butter milk, natural honey, fruits & vegetables, fresh meat, eggs, fresh flour, Besan, chicken, milk, all kinds of salt, Jaggery, curd,fish, cereal grains, and bread.

·        Jewelry& Cosmetics items-Bindi, Sindoor, kajal, palmyra, human hair and bangles.

·        Precious things- Rough diamonds and Gold.

·        Reading materials- Drawing or coloring books alongside stamps, judicial papers, printed books, newspapers.

·        Other items- hoof meal, Bones & horn cores, horn meal, bone grist, Jute & handloom, bone meal, etc.

·        Services- Grandfathering service.

Tax Slab

Products

Services

 

5%

 

1) Food items-frozen vegetables, cream, Fish fillet, cashew nut in shell, packaged food items, branded paneer, pizza bread, ice & snow, skimmed milk powder, tea, Cashew nut, coffee, sabudana, raisin, spices, and rusk.

2) Apparel below Rs 1000/- and footwear below Rs 500/-

3) Fuel items- Biogas, kerosene and coal.

4) Health items- medicine, insulin and stent.

5) Other items-stamp-post marks, postage or revenue stamps, kites, first-day covers, Agarbatti and lifeboats.

 

 

Transport services like railways and air travel

 

12%

 

1) Edible items-Cheese, animal fat
Frozen meat products, ghee, sausage, fruit juices, namkeen, and butter, dry fruits in packaged form, sauces & ketchup.

2) Various mobile phones

3) Cutlery items-fish knives, forks, tongs, Spoons, ladles, and skimmers.

4) Medical items- Ayurvedic medicines and all diagnostic kits & reagents

5) Utility items- Umbrella, sewing machine, tooth powder, eye glasses, playing cards and various boards game like Chess, Carom and ludo etc.

 

6) Rs 1000/- and more worth Apparels.

 

 

Work Contracts, business class air ticket, Non-AC hotels and fertilizers.

 

18%

 

1) Eatable items-preserved vegetables, curry paste, mayonnaise & salad dressings, ice cream, jams, cornflakes, instant food mixes, Biscuits, mixed condiments & seasonings, flavored refined sugar, mineral water
Pasta, pastries & cakes, soups, and sauces.

2)More than Rs500/- worth Footwear

3) Items like electrical transformer,
Printed circuits, speakers & monitors, CCTV, optical fiber, printers (other than multi-function printers) and camera.

4) Other items- Weighing machinery (other than electric or electronic weighing machinery), Bamboo furniture, tissues, sanitary napkins, aluminum foil, Bidi leaves, note books, envelopes, steel products, headgear and its parts,
kajal pencil sticks, padding pools and swimming pools.

 

Telecom services, branded garments & financial services, Information Technology services, AC hotels that serve liquor.

 

28%

 

1) Residuary Edibles-Pan masala wafers coated with chocolate, chewing gum, chocolate not containing cocoa, molasses, aerated water and waffles.

2) Personal care items- Deodorants, shaving creams, after shave, hair shampoo, dye and suns skin.

3) Paint, wallpaper and ceramic tiles.

4) Washing machine, shavers, vacuum cleaner, water heater, weighing machine, Automated teller machine, vending machines, and hair clippers.

5) Automobiles, motorcycles and aircraft for personal use

 

5-star hotels, race club betting and movie tickets above Rs 100/-


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