The Goods and Services Tax (GST) is a single comprehensive tax applicable across India. The applicable GST is a multistage addition along the supply chain but is applicable only once due to Input Tax Credit (ITC) mechanism. The rate applicable varies based on the destination where the end-user consumes the goods or services.
GST comprises three parts:
It applies to all goods manufactured and sold within a state.
The Central government collects it on all transactions within the state, also called an intra-state transaction.
Collected by the Central government on all inter-state transactions, i.e. tax applicable on goods produced in one state and sold in another state.
There is another form of GST known as the UTGST. It applies to all goods manufactured and sold within a union territory.
There are SEVEN (7) slabs of GST on Goods:
- Goods at NIL rate
- Goods at 0.25% rate
- Goods at a 3% rate
- Goods at a 5% rate
- Goods at a 12% rate
- Goods at an 18% rate
- Goods at a 28% rate
There are FIVE (5) slabs of GST on Services:
- Services at NIL rate
- Services at 5% rate
- Services at a 12% rate
- Services at an 18% rate
- Services at a 28% rate
Following are the GST rates applicable to certain Services:
Services at NIL rate
Here are the services that are considered under the NIL rate.
- Charitable activities registered under 12AA of Income Tax (IT) Act.
- Pure services (not including goods) rendered to central or state government, union territory, panchayat, or municipal corporation.
- All construction-related labour contract services provided to individual house construction or those under Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana.
- Renting services for individual residential purposes.
- Services rendered for religious ceremonies
- Renting of rooms at religious places for marriage and other social functions where room rent is equal or less than rupees one thousand per day
- Renting of community halls or open spaces within religious premises where rent is equal or less than rupees ten thousand per day
- Renting for shops and commercial activity within the above premises where the monthly rent is equal or less than rupees ten thousand.
- Hotel, guest house, lodge, inn, club, or campsite daily room tariff equal to or less than rupees one thousand.
- Passengers travelling by air to or from Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura or Bagdogra (West Bengal)
- Goods transportation services by road other excluding those provided by professional goods transporter, courier agency, or inland waterways
- Services provided to transport by rail or other vessels for providing relief in calamities; defence and military equipment; registered newspapers and magazines; railway equipment and materials; edible items – milk, salt, food grain; organic manure.
- Services of life insurance under the National Pension System and IRDA to defence forces; services under ESIC and EPFO
- Services of loading, unloading, packing, storage, or warehouse of rice.
- All toll charges.
- Transmission or distribution of electricity.
- Services by the Reserve Bank of India.
- Services provided by SEBI protecting investors and development and regulation of the securities market
- All card transactions including debit, credit, and charge cards, where the transaction amount is rupees two thousand or less
- Industrial land lease one-time payment transaction for a lease period of thirty or more years
- Legal services to individuals or businesses with turnover up to INR 20 lakh (INR 10 lakh for special states).
- All Veterinary services
- Services collecting or providing news by independent journalists or registered agencies like PTI
- Services of organizing or sponsoring loans to sporting events by registered sports authorities
- Services of coaching and training in sports, culture, and entertainment
- Services for skill development and training by registered government agencies
- Health care services provided by clinics and private practitioners, including ambulance services
- Folk or classical performances by artists including music, dance, theater
- Services relating to farm and agriculture including renting or leasing agro machinery and related equipment
- Services provided by the diplomatic mission in India.
- Services provided by educational institutions to students, faculty, and staff including catering, transportation, or housekeeping
Services at 5% rate
- Rail passengers are travelling by first-class or any air-conditioned class; radio taxi
- Economy class air travel including those under Regional Connectivity Scheme Airport
- Tour operator services
- Renting the car where the cost of fuel is included
- Transport of goods by rail or other vessels; Goods transport of commercial and personal items by road and air
- Selling of advertising space in print media
- Services provided including printing of newspapers, the printing of books, textile yarns, processing of animal skin, hides and leather
Services at 12% rate
- Non AC restaurants not serving liquor.
- Hotel, guest house, lodge, clubs, campsites, etc. with daily room tariff between rupees one thousand and two thousand five hundred
- Air travel other than the economy
- Railway container-based transport services, other than those by Indian Railways
- All chit fund-based services
- Construction of buildings – individual or residential/commercial complex
Services at 18% rate
- AC and non-AC restaurants with a liquor licence
- Outdoor catering services for food and drinks
- Hotel, guest house, lodge, clubs, campsites, etc. with daily room tariff between rupees two thousand five hundred and seven thousand five hundred
- Catering services forming part of the lease package of hotel, convention hall, community hall, club, and pandal
- Cinema hall admission where ticket charges are less than one hundred rupees
- Composite supply of Works Contract as per Clause 119 of section 2 of CGST Act
Services at 28% rate
- Five-star hotels, guest house, lodge, clubs, campsites etc. with daily room tariff equal to or above rupees seven thousand five hundred.
- Entry ticket charges to entertainment, leisure, water, theme parks, casino, racecourse, or premium sporting events like IPL
- Gambling services, including those by race clubs and bookmakers