The Goods and Services Tax is an Indirect tax which was introduced in India on 1st July 2017.
It is applicable throughout India and aimed towards replacing the unhealthy number of cascading taxes levied by the Central and State governments at various levels on the provision of goods and services across the country. It is governed by a council chaired by the Finance Minister of India.

It was tabled in the Lok Sabha by the Union Finance Minister as the Constitution [122nd Amendment] Bill, 2014 on 19th December, 2014. The same was renumbered and passed by the Rajya Sabha as the “Constitution (One Hundred and First Amendment) Act, 2017”.

Under GST, goods and services are taxed at the following rates, 0%, 5%, 12% ,18% and 28%.

  1. Rate Classification for Goods:

Exempt

5%

12%

18%

28%

28%+Cess

Food Grains

Cereals

Milk

Jaggery

Common Salt

Coal

Sugar

Tea & Coffee

Drugs & Medicine

Edible Oil

Fruit Juices

Vegetable Juices

Beverages containing milk

Jams

Kitchenware

Hair Oil

Soap

Toothpaste

Glass fibre

Air conditioner

Refrigerators

Small cars (1% / 3% cess)

Luxury cars (15% cess)

2. Rate classification for services:

Exempt

5%

12%-18%

28%

Education

Healthcare

Residential accommodation

Hotel/ Lodges with tariff below INR 1000

Goods transport

Rail tickets (other than sleeper class)

Economy class air tickets

Cab aggregators

Selling space for advertisements in print media

Works contract

Business Class air travel

Telecom services

Financial services

Restaurant services

Hotel/ Lodges with tariff between INR 1000 and 7500

Cinema tickets

Betting

Gambling

Hotel/ Lodges with tariff above INR 7500

Apart from the rates mentioned above:

  1. Pearls, Precious or Semi-Precious stones, Diamonds (other than rough diamonds), Precious Metals (like gold and silver), Imitation Jewellery, Coins – 3%.

  2. Rough Diamonds – 0.25%

  3. Petroleum products, i.e. petroleum crude, high speed diesel, motor spirit, aviation turbine fuel and natural gas are yet to be brought under the GST regime.

  4. Alcohol for human consumption has been kept outside the purview of GST.