Commerce · Ch 10 — Goods and Services Tax
GST Rate Structure — Rate Slabs
GST Rate Structure — Rate Slabs
4. GST Rate Structure — Rate Slabs
Goods and services under GST are not all taxed at one single rate — they are grouped into broad rate slabs, decided and periodically revised by the GST Council (Section 2), based chiefly on whether the item is an essential of daily life, an item of mass consumption, a standard good/service, or a luxury/sin good.
| Rate slab | Broad nature of goods/services | Illustrative examples |
|---|---|---|
| 0% (Nil-rated/Exempt) | Essential items of daily consumption | Fresh fruits and vegetables, unbranded food grains, milk, curd, fresh bread, printed books, and specified essential services such as basic healthcare and education |
| 5% | Items of mass consumption and essential-but-processed goods | Packaged food items, edible oils, spices, coal, small restaurants, economy air/rail travel |
| 12% | Standard, moderately essential goods and services | Processed/packaged food, business-class air travel, certain building materials, computers |
| 18% | The standard/default rate — most goods and services | Soaps, toothpaste, industrial intermediates, most services (including, commonly, the standard rate used for illustrative computations in this chapter) |
| 28% | Luxury and demerit ("sin") goods | Motor cars, tobacco products, aerated/carbonated drinks, high-end consumer durables |
A Compensation Cess is additionally levied, over and above the 28% slab, on specified luxury and sin goods (such as tobacco products, aerated drinks, and motor vehicles), to compensate States for any revenue shortfall arising from the shift to GST.
These slabs are illustrative, not a fixed, permanent list …
One of the broad tax-rate bands (0%, 5%, 12%, 18%, 28%) into which goods and services are grouped under GST, set and revis …
An additional levy, over and above the 28% slab, on specified luxury/sin goods, used to compensate States for revenue shortfall …