The landscape of taxation in India underwent a transformation with the introduction of the Goods and Services Tax (GST). One of the most critical aspects of this reform is the GST rate, which impacts businesses, industries, and consumers across the nation. Stay informed about the significance of GST rates and keep up with the latest updates on GST rates in India for 2023 with our comprehensive guide.
Decoding GST Rates
GST rates denote the percentage of tax applied to the sale of goods or services, as defined by the Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), and Integrated Goods and Services Tax (IGST) Acts. Registered businesses under the GST regime must issue invoices reflecting the applicable GST amounts on the value of supply.
Intra-state transactions under CGST and SGST have nearly identical GST rates. Conversely, for inter-state transactions under IGST, the rate is essentially the sum of the CGST and SGST rates.
Varieties of GST Rates and the Indian GST Rate Structure
For regular taxpayers, the primary GST slabs include 0% (nil-rated), 5%, 12%, 18%, and 28%. Although less common, there are also rates like 3% and 0.25%.
Composition-taxable individuals are subject to lower or nominal GST rates, such as 1.5%, 5%, or 6%, based on their turnover. Additionally, the concept of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) exist under GST, with rates of 2% and 1%, respectively.
These GST rates represent the total for IGST on interstate supply or the combined CGST and SGST for intrastate supply. Multiplying these rates by the assessable value of the supply yields the GST amounts detailed on a tax invoice.
Furthermore, the GST law mandates the imposition of cess on select items, including cigarettes, tobacco, aerated water, petrol, and motor vehicles. These cess rates vary widely, ranging from 1% to 204%.
Children’s Drawing & Colouring Books
|0%||Unbranded Natural Honey||Prasad|
Phool Bhari Jhadoo
Roasted Coffee Beans
Skimmed Milk Powder
Footwear (< Rs.500)
|5%||Milk Food for Babies|
Apparels (< Rs.1000)
Coir Mats, Matting & Floor Covering
Mishti/Mithai (Indian Sweets)
Coffee (except instant)
Preparations of Vegetables, Fruits, Nuts or other partsof Plants including Pickle Murabba, Chutney, Jam, Jelly
|12%||Packed Coconut Water||Umbrella|
|18%||Hair Oil||Capital goods|
|28%||Small cars (+1% or 3% cess)|
High-end motorcycles (+15% cess)
|28%||Consumer durables such as AC and fridge|
Beedis are NOT included here
Luxury & sin items like BMWs, cigarettesand aerated drinks (+15% cess)
What are the GST rates in India 2023?
The beginning of 2023 has brought about significant alterations in GST rates, as approved in the final week of December 2022. During recent sessions, the GST Council revisited and adjusted rates for key items, building upon the changes made throughout 2022. These revisions aimed to rectify the inverted tax structure and enhance revenue generation. This summary provides an overview of the modifications to GST rates in India and introduces the new rates applicable in 2023.
GST Rate Changes at 49th GST Council meeting
Key GST rate revisions
The 49th GST Council meeting took place on 18th February 2023 to recommend certain GST rate revisions as follows-
|Rab/Liquid jaggery*||18%||Nil (sold lose) / 5% (sold labelled/pre-packaged)|
|Certain tracking devices fixed on durable containers^||Applicable rate||Nil|
|Coal rejects supplied to the washeries*||Applicable cess rate||Exempted from cess|
|Authority, board or a body set up by the Central Government or State Government including National Testing Agency (NTA) for conduct of entrance examination*||Applicable rate||Exempted|
Other Significant Decisions on GST Rates
Certain noteworthy decisions pertaining to GST rates were addressed during the latest discussions:
- The matter of aligning Multi-Utility Vehicles (MUVs) classification with Sports Utility Vehicles (SUVs) remained unresolved due to time constraints.
- The reconsideration of GST on cement was deferred to the fitment committee for deeper analysis, with the possibility of discussion in the upcoming Council meeting.
- Despite deliberations, no consensus was reached for a GST rate reduction on health products derived from millets, indicating the need for further extensive discussions.
- Notable changes were observed in services, particularly those related to renting premises for commercial purposes to local bodies, and services offered by registrars of courts/tribunals. These services will now attract GST under the reverse charge mechanism, effective from 1st March 2023 as per the CGST (Rate) Notification No. 2/2023 dated 28th February 2023.
GST Rate Revisions from the 48th GST Council Meeting
The 48th GST Council meeting, convened on 17th December 2022, yielded a series of significant rate changes. These recommendations, sanctioned by the GST Council and subsequently announced by the Central Board of Indirect Taxes and Customs (CBIC), are slated to take effect from 1st January 2023. The revised rates from this meeting encompass various sectors and are poised to impact the fiscal landscape significantly.
|Item description||Before amendment||After amendment|
|Husk of pulses, along with chilka and concentrates, chuni or churi, and khanda used as cattle feed*||5%||nil|
|Ethyl alcohol sold to refineries to blend it with the motor spirit or petrol||18%||5%|
|Sale of Mentha arvensis, similar to Mentha oil||No RCM||Under RCM|