GST 2.0: A relook at new GST rates of essential items
As the new GST rates come into effect from today, here’s a list of essential items, and there new GST rates:
Agriculture
Machinery/Equipment: 12% ➝ 5%
Healthcare
Medicines: 5% (concessional; some nil-rated)
Medical Devices/Instruments: 5%
Automobiles
Small Cars (Petrol/LPG/CNG ≤1200cc & ≤4000mm; Diesel ≤1500cc & ≤4000mm): 28% ➝ 18%
Mid-size & Big Cars / SUVs / MUVs / MPVs / XUVs ( >1500cc, >4000mm, ground clearance ≥170mm): 40% (no cess)
3-Wheelers (HSN 8703): 28% ➝ 18%
Buses (≥10 persons, HSN 8702): 28% ➝ 18%
Ambulances: 28% ➝ 18%
Goods Transport Vehicles (HSN 8704): 28% ➝ 18%
Motorcycles ≤350cc: 18%
Motorcycles >350cc: 40%
Mobility
Bicycles & Parts: 12% ➝ 5%
Renewable Energy
Equipment/Devices: 12% ➝ 5%
Building Materials
Marble, Travertine & Granite Blocks: 12% ➝ 5%
Opticals
Spectacles (vision-correcting): 12% / 18% ➝ 5%
Other Goggles: 18%
Electronics & Appliances
Batteries (HSN 8507): Uniform 18%
ACs & Dishwashers: 28% ➝ 18%
TVs & Monitors: Uniform 18%
Services — Job Work
Pharma Products: 12% ➝ 5% (with ITC)
Leather/Skins (Ch. 41): 12% ➝ 5% (with ITC)
Residuary Job Work: 12% ➝ 18%
Lifestyle Services
Beauty & Wellness (salons, gyms, spas, yoga, barbers, fitness centres): 18% ➝ 5% (no ITC)
Entertainment & Betting
Lottery, Gambling, Casinos, Horse Racing: 40%
Admission to Sporting Events (e.g. IPL): 40%
Recognized Sporting Events:
Ticket ≤ ₹500: Exempt
Ticket > ₹500: 18%
FAQs
What is the GST rate on food preparations not elsewhere specified in any of the schedules?
Food preparations not elsewhere specified will attract a GST rate of 5%.
What is the reason for the 40% rate on 'other non-alcoholic beverages'?
The principle behind the recent rate rationalization is to keep similar goods at the same rate to avoid issues of misclassification and disputes.
What is the reason for differential tax treatment for natural honey and artificial honey?
This is intended to promote natural honey.
Why is there a different tax treatment between paneer and other cheese?
The changes have been made in respect of paneer supplied in pre-packaged and labelled form to provide the same tax treatment as loose paneer, which was already exempt. The measure is intended to promote Indian cottage cheese, which is mostly produced by the small-scale sector.
What is the reason for revising GST rate only on specified varieties of Indian bread?
All Indian breads, by whatever name called, have been exempted.
What is the reason for reducing GST on face powder and shampoos? Will this not benefit MNCs and luxury brands?
These are daily use items for almost all segments of the population. The objective is to simplify the tax structure, and administering a tax based on brand or value would create complexity.
What is the new GST rate on toilet soap bar? Why has a distinction been kept between liquid soap and soap in bars?
The new GST rate on toilet soap bar is 5%. This is intended to lower the monthly expenditure for the lower-middle class and the poorer sections of society.
Why has GST not been reduced on mouthwash which is also commonly consumed across households like dental floss?
The GST rate was reduced to 5% on toothpaste, toothbrush, and dental floss, which are considered basic dental hygiene goods.