Introduction

Our previous blog post gave you something to think about with regards to Goods and Service Tax (GST) taking some sheen off Budget 2018. We had also covered everything with regards to GST back in 2017. By January of this year, however, we have had a number of revisions being done already in GST. We take a look at the initial GST structure and also get a lowdown of the revisions introduced. Let’s get started.

Initial GST Structure (Item-wise breakup)

GST was divided into 4 tax slabs

0% GST on commodities such as food grains, rice, wheat, fresh meat, chicken, eggs, milk, buttermilk, curd, natural honey, fresh fruits, vegetables, flour, bread, salt, stamps, printed books, newspapers, bangles, jute, handloom, hotels and lodges with tariff below Rs.1000.

Also, 0.25% GST would be levied on rough cut diamonds and 3% on gold.

Slab 1 (5%)

5% GST on packaged food items, kerosene, coal, medicines, small restaurants, railway, air fare, spices, tea, coffee, frozen vegetables, fish fillet, milk powder, cream, apparel below Rs.1000, and footwear below Rs.500

Slab 2 (12%)

12% GST on frozen meat products, sausages, animal fat, fruit juices, ayurvedic medicines, packaged dry fruits, butter, cheese, tooth powder, ghee, incense, coloring books, umbrella, sewing Machine, cell phones, non AC hotels, business class air ticket fertilizers, and apparel above Rs.1000

Slab 3 (18%)

18% GST on footwear above Rs.500, instant food mix, mineral water, steel products, tampons, notebooks, preserved jams, sauces, soups, ice-cream, preserved vegetables, refined sugar, pastries, cakes, cornflakes, tissues envelopes, camera, speakers, monitors, branded garments, financial services, telecom services, and air-conditioned hotels that serve liquor.

Slab 4 (28%)

28% GST on alcohol, chocolate wafers, pan masala, aerated water, paint, deodorants, shaving creams, after shave, hair shampoo, sunscreen, ceramic tiles, cigarettes, chewing gum, water heater, dishwasher, washing machine, weighing machine, ATM, vending machines, vacuum cleaner, shavers, automobiles, motorcycles, five-star hotels, and tobacco.

GST Revision

During the GST Council’s 23^rd meeting that was held on November 10th 2017, a number of changes were discussed. The following revisions were implemented.

The highest tax slab of 28% on luxury items are to be continued.

No tax to be imposed on items such as fresh meat, fish, chicken, jute, milk, eggs, curd, butter milk, natural honey, fresh fruits, flour, besan, vegetables, salt, bindi, bread, Prasad, sindoor, stamps, printed books, judicial papers, bangles, newspapers, handloom, bone meal, hoof meal, horn meal, palmyra jiggery, cereal grains hulled, all types of salt, kajal, children’s drawing books, clay idols, brooms, human hair, khadi, seed oil cake, charkha, certain dried vegetables, unworked coconut shell, and bangles made of shellac. No tax is also imposed on hotels and lodges with tariff below Rs.1000.

0.25% tax slab to include rough industrial diamonds including unsorted rough diamonds.

5% tax slab included goods such as, apparel below Rs.1000, fish fillet, footwear below Rs.500, packaged food items, cream, skimmed milk powder, branded paneer, coffee, frozen vegetables, tea, pizza bread, spices, sabudana, kerosene, rusk, medicines, coal, stent, cashew nut, lifeboats, ice and snow, raisin, insulin, biogas, kites, agarbatti, stamp-post marks, postage and revenue stamps, branded food, dried tamarind, walnuts, dhoop batti, roasted gram, saree fall, corduroy, oil cakes, paper mache items, duty credit scrips, corals, cotton quilts, rosaries, prayer beads, hawan samagri, grass, reed and leaf fibre products, pouches, wallet, khakra, plain chapatti, namkeens, ayurvedic, homeopathy medicines, paper waste, plastic waste, scrap, rubber waste, biomass briquetes, e-waste, finished leather, chamois, coir cordage, ropes, jute twine, coir products, flour of potatoes, chutney powder, fly ash brick, aircraft tyres, puffed rice chikki, finished leather, and fishing hooks.

From January 18^th, items such as tailoring service, tamarind kernel powder, mehendi paste (in cones), scientific and technical instruments, basketware, velvet fabric, wickerwork, cigarette filter rods, services, all restaurants, restaurants of hotels with room tariff of less than Rs.7500, food parcels, textile work, transport services, railways, air transport, and supply of e-waste were included into the 5% tax slab.

12% tax slab already includes goods such as frozen meat products, butter, apparel above Rs.1000, cheese, packaged dry fruits, ghee, sausage, animal fat, fruit juices, namkeen, bhutia, ayurvedic medicines, tooth powder, colouring books, agarbatti, umbrella, picture books, cellphones, sewing machines, sauces, ketchups, diagnostic kits, exercise books, spoons, ladies, forks, cake servers, skimmers, tongs, fish knives, corrective, spectacles, chess board, playing cards, board games, wood, rubber band, metals, stone, table, marble idols, kitchenware, idli/dosa batter, sprinklers, textile caps, statues, cotton quilts, statuettes, ceramic articles, pedestals, ornamental articles, bells, porcelain items, gongs, non-electric of base metal, synthetic filament yarn, carving material, nylon, polyester, acrylic, artificial filament yarn, viscose rayon, sewing thread of manmade staple fibres, etc.

From November 10, 2017, the following items were shifted from 18% to the 12% tax slab: refined sugar, sugar cubes, condensed milk, curry paste, pasta, salad dressings, mayonnaise, mixed seasoning, mixed condiments, medicinal grade oxygen, diabetic food, hand bags, printing ink, cotton, jute shopping bags, hats, machinery for horticultural, forestry, harvesting and threshing, specified sewing machine parts, furniture wholly made of bamboo or cane, and spectacle frames.

Since January 18^th, sugar boiled confectionery, drip irrigation system, drinking water packed in 20 liter bottles, bio-diesel, fertilizer grade phosphoric acid, bio-pesticides, mechanical sprayer, bamboo wood building joinery, state-run lotteries, non-ac hotels, business class air ticket, work contracts, and fertilizers were added to the 12% tax slab.

18% tax slab includes items such as footwear costing Rs.500, goodwill, trademarks, bidi, software, all types of biscuits, pasta, flavored refined sugar, pastries, cornflakes, cakes, sauces, jams, instant food mixes, ice cream, envelopes, tissues, tampons, steel products, note books, camera, printed circuits, speakers, kajal pencils, headgear, weighing machinery, aluminum foil, electrical transformer, CCTV, bamboo furniture, optical fiber, swimming pools, padding pools, mayonnaise and salad dressings, printers, curry paste, mixed condiments, mixed seasonings, raincoats, tractor parts, disposable gloves, medical grade, computer monitors (up to 20 inch), rice rubber rolls, custard powder, kitchen gas lighters, poster colour, children modeling paste, loose leaf binders, letter clips, paper clips, paper clips, indexing tags, staples in strips, and aircraft engines.

Since November 10, 2017, the following items were moved from 28% to the 18% tax slab: cables, wire, electrical insulators, insulated conductors, switches, electrical plugs, fuses, sockets, electrical connectors, relays, panels, electrical boards, cabinets, consoles, particle/fibre boards, plywood, wooden frame, article of wood, paving block, mattress, furniture, bedding and similar furnishing, suitcase, trunk, vanity cases, travelling bags, detergents, washing and cleaning preparations, liquid or cream for washing the skin, shampoos, hair dyes, hair cream, henna powder or paste, shaving or after shave preparations, personal deodorants, bath preparations, perfumery, cosmetic or toilet preparations, room deodorizer, toilet waters, perfumes, make-up preparations, beauty products, pumps, compressors, fans, lamp and light fitting, primary batteries, primary cell, sanitary ware, plastic products, floor covering, baths, shower, sinks, washbasins, seats, sanitary ware of plastic, slabs of marbles and granite, goods of marble and granite such as tiles, ceramic tiles, vacuum flasks, lighters, wrist watches, clocks, watch movements, watch cases, straps, apparel and clothing accessories of leather, guts, fur skin, artificial fur, saddler and harness of any animal, articles of cutlery, stoves, cookers, similar non electric domestic appliances, razor and razor blades, multi-functional printers, cartridges, office and desk equipment, door, windows and aluminum frames, plaster products such as board, sheet, cement or concrete, artificial stone, articles of asphalt or slate, articles of mica, ceramic flooring blocks, pipes, conduit, pipe fitting, wallpaper and wall covering, glasses of all kinds also including mirror, safety glass, sheets and glassware, electrical, electronic weighing machinery, fire extinguishers and fire extinguishing charge, fork lifts, lifting and handling equipment, bull dozers, excavators, loaders, road rollers, earth moving and leveling machinery, escalators, cooling towers, pressure vessels, reactors, crankshaft for sewing machines, tailor dummies, bearing housings, gears and gearing, ball or roller screws, gaskets, electrical apparatus for radio and television broadcasting, sound recording or reproducing apparatus, traffic control equipment, signaling, safety and transport equipment, physical exercise equipment, festival and carnival equipment, swings, shooting galleries, roundabouts, gymnastic and athletic equipment, all musical instruments and their parts.

From January 18, the following items were moved towards the 18% tax slab: bio-fuels powered buses, second hand medium and large cars, SUVs, theme park and water park admission charges, cigarette filter rods, restaurants in hotel premises having tariff of Rs.7500 and above, telecom services, branded garments, IT services, and outdoor catering.

The 28% tax slab includes goods such as molasses, pan masala, aerated water, sunscreen, paint, ceramic tiles, wallpaper, water heater, dishwater, weighing machine, washing machine, vacuum cleaner, automobiles, motorcycles, aircraft for personal use, private run lotteries, race club betting, cinema, etc.

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