Courier services, mobile phone tariffs, Mobile bills, tuition fees, salon visits, insurance premiums, banking charges, broadband services will get costlier by 3%. These were earlier charged a 15% service tax, and will now fall under 18% tax slab.
Automobile sector reforms reduce GST from 28% to 18% on small cars, motorcycles (up to 350cc), buses, trucks, ambulances, and three-wheelers, while maintaining high rates for large luxury vehicles. Housing and infrastructure relief with GST on cement cut from 28% to 18%, easing construction costs.
Certain goods and services are exempt from GST due to their essential nature. This exemption applies based on the type of supply, not the supplier. Example: Healthcare services, educational services, and public utility services (e.g., water supply) are exempt from GST.
Types of GST in India
CGST (Central Goods and Services Tax) SGST (State Goods and Services. IGST (Integrated Goods and Services Tax) UTGST (Union Territory Goods and Services Tax)
At its core, GST 2.0 introduces a simplified two-slab structure (5% and 18%), replacing the earlier four-tier system of 5%, 12%, 18%, and 28%. Essentials like food, medicines, and education items move to the Nil or 5% category, while household goods and consumer durables see major rate cuts.
Dry fruits classified as value-added products were previously subject to a 12 percent GST, but now this has been reduced to 5 percent.
The different slabs for GST are 5%, 12%, 18% and 28%. GST calculation can be explained by a simple illustration : If a goods or services is sold at Rs. 1,000 and the GST rate applicable is 18%, then the net price calculated will be = 1,000+ (1,000X(18/100)) = 1,000+180 = Rs. 1,180.
The Authority for Advance Ruling (AAR) has ruled that establishments selling pre-manufactured ice cream, like ice cream parlors, are subject to an 18% tax with Input Tax Credit (ITC) eligibility, as the sale of ice cream does not qualify as a service.
The Value Added Tax (VAT) or Goods and Services Tax (GST) are broadly based consumption tax assessed on the value added to goods and services. It applies to all goods and services that are bought and sold for use or consumption in foreign tax jurisdiction.
GST is a 10% tax added to most goods and services sold in Australia, but not everything in the food and beverage sector is treated equally. Some items are GST-free, while others are fully taxable, and understanding the difference can have a direct impact on your pricing, bookkeeping, and compliance.
Common Examples of GST Exempt Transactions:
Financial services – Most banking services, interest payments, and insurance premiums. Residential rent – Rental income from residential properties. Donated goods and services – Items or services that are given away without payment.
GST on tea ranges from 0% to 5%, while coffee and spices attract 5% to 12% GST. Processed or packaged spices may attract a higher GST rate. Proper classification under the correct HSN code ensures compliance.
There are only minimal items which are not reportable for GST purposes. These include bank transfers between accounts, stamp duty, depreciation and salary/wages. These are purchases/sales that have a 0% GST rate.
Daily food items like UHT milk, roti, paratha, paneer, and packaged snacks brought under 5% or Nil GST, easing household expenses. Reforms promote affordability, healthier lifestyles, and improved ease of living for youth and households.
The GST Council, a constitutional body, oversees the GST regime. They make key decisions on tax rates, exemptions, and policies. Furthermore, the CGST Act and IGST Act provide the legal foundation for GST implementation.