GST is likely to be implemented from 1st July 2017. GST rates have been finalized for 1211 goods and 36 broad categories of services. Nearly 50% of goods fall under the 18% tax rate, 14% under 5% tax rate, 17% under 12% tax rate and 19% under 28% tax rate. In case of services, the majority of services come within the 18% tax rate.
GST rates for some Good and Services | |||||
0% | 5% | 12% | 18% | 28% | GST rates are yet to be decided |
Fresh and pasteurized milk | Coffee | Chemicals | Pastries and cakes | Aerated drinks | Alcohol for human consumption |
Curd | Tea | Agarbatti | Laptops & Desktops | Consumer Durables | Petroleum crude/Petrol/Diesel/ Aviation fuel/Natural gas |
Fruits | Sugar | Toothpowder | Cornflakes, Pasta | Passenger Vehicles | Bidis |
Vegetables | Edible oil | Candles | Hotels with room rent Rs.2500-5000/day | Five star hotels | Footwear |
Jaggery and gur | Coal | Dry fruits | Hair Oil | Movie tickets | Textiles |
Food grains and cereals | Airlines (Economy class) | Airlines (Business class) | Slag, ash and residues | Racing | Gems and Jewellery |
Common salt | Railways(AC) | Bicycles and other cycles | Essential oils | Betting on racing | |
Education | On cab aggregators (Ola and Uber) | Tractors | Banking and insurances | Commercial Vehicles | |
Healthcare | Aluminum Ore | Electrically operated vehicles | Telecom | Three and two wheelers | |
Hotel and lodges with tariff below Rs.1000 | Fish and Fish fillets L | Butter and other fats | Cable & DTH | Pan Masala | |
Butter milk | Transport of goods by rail | Sale of property | Restaurants/ Out-door Catering | Amusements parks/IPL | |
Note: rates above do not include cess | |||||
As the states would be losing out on revenues earned with the implementation of GST, the GST Council has planned to levy a cess over the rate of 28% on certain luxury and demerit goods for a period of five years in order to compensate states for any revenue loss on account of implementation of GST. Some of the compensation cesses are:
Pan Masala | 60% |
Tobacco and Tobacco products | 71-204% |
Aerated drinks | 12% |
Cars & UVs with engine >1500cc | 15% |
Coal, lignite and peat | Rs 400/tn |
Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata.He also manages a portfolio on the online platform Kristal. Find link to the strategy named ‘The Tortoise’