New GST Rate Slab in India and Online GST Registration
Introduction
The Goods and Services Tax (GST) is a unified tax system in India that replaced multiple indirect taxes. It is categorized into different types and applied at various rate slabs based on the nature of goods and services. For businesses, understanding these types, rate slabs, and the GST registration process is essential for compliance and smooth operations. This article provides a brief overview of GST types, rates, and the registration process.
What is Goods and Services Tax (GST)?
Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It replaced multiple indirect taxes such as VAT, service tax, and excise duty. GST aims to create a unified market, simplify tax structures, and reduce the cascading effect of taxes.
Types of GST
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CGST (Central Goods and Services Tax)
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SGST (State Goods and Services Tax)
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IGST (Integrated Goods and Services Tax)
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UTGST (Union Territory Goods and Services Tax)
For intrastate transactions, the GST rates in CGST and SGST are roughly same. On the other hand, the GST rate for IGST (interstate transactions) is almost equal to the combined rate of CGST and SGST. UTGST applied in union territories and functioning similarly to SGST.
What is GST rate slab?
GST rate slabs define the different tax rates that apply to goods and services under the Goods and Services Tax (GST) system in India. These slabs group products and services into specific tax categories based on how essential they are. The GST system categorizes items into different slabs based on their nature and necessity under CGST, SGST, IGST Act.
In accordance with GST law, the GST system in India divides products and services into a number of tax slabs to provide uniformity and transparency in taxing system. These slabs come in the following rate: 0% (nil-rated), 5%, 12%, 18%, and 28%; certain items are subject to an extra cess. An outline of the various GST rates and structures may be found here.
| Tax Rates | Products |
| 0% | Fresh Vegetables, Salt, Prasad, Palmyra Jaggery, Phool Bhari Jhadoo, Unpackaged Foodgrains, Unbranded Atta/Maida, Unpackaged Paneer, Gur, Besan, Unbranded Natural Honey, Milk, Eggs, Kajal, Curd, Lassi, Health Services, Children’s Drawing & Coloring Books, etc. |
| 5% | Sugar, Packed Paneer, Chai, Coal, Edible Oils, Raisin, Domestic LPG, Roasted Coffee Beans, PDS Kerosene, Milk Powder, Cashew Nuts, Footwear (< Rs.500), Milk Food for Babies, Apparels (< Rs.1000), Fabric, Coir Mats, Matting & Floor Covering, Masala, Incense stick, Mishti/Mithai (Indian Sweets), Life-saving drugs, Coffee, etc (except instant) |
| 12% | Butter, Computers, Ghee, Processed food, Almonds, Mobiles, Fruit Juice, Preparations of Vegetables, Fruits, Nuts or other parts of Plants, including Pickle, Chutney, Jam, Jelly, Packed Coconut Water, umbrella, etc |
| 18% | Hair Oil, Capital goods, Toothpaste, Industrial Intermediaries, Soap, Ice-cream, Pasta, Toiletries, Corn, Flakes, Computers, Soups, Printers, etc |
| 28% | Small cars (+1% or 3% cess), High-end motorcycles (+15% cess), Consumer durable such as AC and fridge, All tobacco products, Beedis are NOT included here, Luxury & sin items like BMWs, cigarette and aerated drinks (+15% cess), etc |
New GST rates list for goods and services
The 53rd GST Council meeting on 22nd June 2024 brought key recommendations, including changes to GST rates, trade facilitation, and compliance simplifications. The Council made several rate revisions to correct the inverted tax structure and boost revenue, with more expected in future meetings. The summary of the new GST rates list for 2024 is provided below.
New GST rates list for goods
| Item | Previous GST Rate | Revised GST Rate | Remarks |
| Aircraft parts and components | Variable | 5% | Uniform rate for parts, components, testing equipment, tools, tool-kits |
| Milk cans (steel, iron, aluminum) | Variable | 12% | This applies to all types |
| Cartons, boxes, and cases (paper board) | 18% | 12% | HS codes 4819 10 and 4819 20 |
| Solar cookers | Variable | 12% | Includes single or dual energy sources |
| Poultry-keeping machinery parts | 12% | 12% | Clarification and regularization |
| Sprinklers, including fire-water | 12% | 12% | Clarification and regularization |
| Defense forces equipment | Variable | Exempt | IGST exemption extended for 5 years till June 30, 2029 |
| RAMA research equipment | Variable | Exempt | Subject to specified conditions |
| Compensation Cess for SEZ imports | Variable | Exempt | Effective from July 1, 2017 |
| Aerated beverages (Defense supply) | Variable | Exempt | Supply by Unit Run Canteens under the Ministry of Defense |
| Technical documentation for AK-203 kits | Variable | ADHOC IGST | For Indian Defense forces |
New GST rates list on Services
| Service Description | Previous GST Rate | Revised GST Rate | Remarks |
| Indian Railways services to the public | Variable | Exempt | Includes retiring rooms, waiting rooms, cloakroom services,platform tickets, battery-operated car services |
| Special Purpose Vehicles (SPV) services to Indian Railways | Variable | Exempt | Infrastructure use and maintenance services by Indian Railways |
| Co-insurance premium apportionment | Variable | No Supply | Regularization of past practices |
| Accommodation services (up to ₹20,000 per month) | Variable | Exempt | A minimum continuous period of 90 days is required |
| Re-insurance/ceding commission transactions | Variable | No Supply | Regularization of past practices |
| Reinsurance services for specific insurance schemes | Variable | No Supply | Regularization for services covered under notification No. 12/2017-CT |
| Retrocession (re-insurance of re-insurance) | Variable | Exempt | Clarification provided |
| RERA statutory collections | Variable | Exempt | Clarification provided |
| Incentive sharing for RuPay/BHIM-UPI transactions | Variable | Not Taxable | Clarification provided |
GST registration process
The GST registration process involves visiting the official GST portal and filling out the application form by providing details such as the business name, PAN, mobile number, and email ID. Once registered, you will receive an OTP for verification. After entering the required business information, including bank account details and business address, upload necessary documents like proof of business, identity proof, and photographs. After you successfully submit the application, the system generates an Application Reference Number (ARN) for tracking. Once verified by authorities, you receive a GSTIN (Goods and Services Tax Identification Number), completing the registration process.
Conclusion
From consumers to businesses, understanding tax rates in India, especially the Goods and Services Tax (GST), is essential in 2024. The GST system classify products and services based on need. The recent change is to make basic products easier to access and improve company compliance. As the government continues to improve these rates and processes, keeping information can help individuals and private companies make more advantageous financial decisions. A transparent and efficient tax system supports economic growth and ensures a fair distribution of the tax burden.
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