An overview of GST rates in India 2016/2017

The GST Council is continuously putting efforts in the new Indian taxation process so that it can get implemented effectively and exhibit its true potential. And since the taxation came into effect, multiple GST Council and government meetings and conventions have been arranged for the discussions on making the GST better. The 25th meeting of the GST Council, in several ways, introduced ideas that could bring relief to the burning matter of the new taxation regime.

The GST is proposed to:

  • Eliminate the tax evasion.
  • Bring a unified taxation system.
  • Remove the cascading effects of the older taxation system.

Although, the GST, after being implemented, has choked some of the major loopholes down through its strict seeming structure. The major advantage that the government is enjoying with the GST regime is the complete digitalization of the process. It enhances the scrutiny approach for the taxation and makes every aspect transparent, not only for the government but for the taxpayers as well.

Initially, the fluctuations in the allocation of the goods and services to different tax percentage slabs caused discomfort. But, the stark visibility of the rates going down builds a wave of amusement amongst all the businesses all over the nation. And to this enjoyment not only the reduced taxation rates added the quality, but the exemption of many of the small businesses made the entire nation sigh with relief. Wholly, the latest GST rates in India 2016/2017 played a very important role in providing an instant and efficient solution to the problems of every business registered under the GST Act.

Here are some of the recent and revised GST rates in India:

  1. Under the category of nil or 0%- The most important sector of the nation that made its entry into the exemption list is agriculture. All the agriculture-related practices have been exempted from the GST regime. Besides agriculture, the goods of daily usage like milk, bread, eggs, fruits, vegetables, newspapers, contraceptives etc. are also exited from the list.
  2. Under the category of 5%- This particular category basically consists of the goods that are used for the domestic and household purposes. It includes tea, coffee, medicines, blood vaccines, water heater, steel utensils, broom, kitchen articles, safety matches, homeopathy, mosquito nets, khadi yarn, paper/rubber scrap, organic fertilizer, incense sticks, nuclear fuel, fishing vehicles etc.
  3. Under the category of 12%- Mostly consisting of food and items of general utility, this section includes dry fruits, tooth powder, biogas, equipment used for sterilization, horticulture products, refined sugar, printing ink, handbags, toiletries, sewing machine, bicycles, electric vehicles etc.
  4. Under the category of 18%- Covering a different range of usable products, this section includes tampons, cornflakes, speakers, monitors, insecticides, helmets, mattress, zinc goods, marble, granite, school bags, wrist watches, lighters, fire extinguishers, glasses of all kind, gymnastic equipment, sunglasses, telescope, projectors etc.
  5. Under the category of 28%- The highest percentage of the tax rate is applicable to the expensive household and convenience items. This section includes automobiles, aerated water, ATM, vending machines, protein concentrates, vacuum cleaner, air-conditioners, fax machines, refrigerators, piano, electric shavers, sugar syrups, toothpaste, artificial fur, wigs, revolvers, rubber tires, etc.

The consequences of the revised rates

Soon after the GST rates were decreased and made appropriate as per the requirement of the businesses, the taxation regime experienced a slight, but noticeable rise in the revenue. The major relief was made for the agricultural sector as it is the core activity in which the majority of Indian population is involved. The second biggest benefit, with the exemption and reduced rates of the GST, was received by the SMEs of the nation. The small and medium-sized businesses could now easily comply with the rules and regulations of the GST Act and maintain a credible tax compliance.

The gist

Although the taxpayers of the nation have seen some of the discouraging events of the GTS regime whether it is the crash of the portal or the differing ideologies on the tax rate, the more the system is evolving the easier it is becoming to comply with. With the cumulative efforts of the people and the government, the Goods and Services Tax will achieve its ultimate goals making the nation corruption-free.