Expected rates of GST :
The IGST and CGST Acts do not indicate GST rate structure.
As per section 9 of CGST Act, rate of CGST will be as notified by Central/State Government. The rate shall not exceed 20%. Same provision will be in SGST Act of each State.
Thus, total GST rate for intra-state supplies will not exceed 40% [20% CGST and 20% SGST].
As per section 5 of IGST Act, rate of IGST will be as notified by Central Government. The rate shall not exceed 40%.
Most probably, the GST rates will be notified based on HSN Code. Customs Tariff Act will be taken as base.
GST rates will be contained in notification giving references to HSN code as per Customs Tariff Act.
GST rates on supply of services will be determined by GST. In all probabilities, the present classification of services in Finance Act, 1994 [service tax law] is likely to continue.
The GST Council has decided and has agreed upon various slabs of rates. The slabs fixed are 5%, 12%, 18% and 28%.
In my view, the average slabs may be around following average rates –
SGST plus CGST total Supply of Goods and Services Rate % [ The same rate f or IGST].
- SGST plus CGST total Rate % [ The same rate f or IGST] : supply of goods and services
1. Natural and un-processed produces in unorganised sector, basic agricultural produce, goods having social implications e.g. national flag, newspapers, securities, items which are legally barred from taxation
2. Basic education services, basic medical services, statutory activities of Government, direct Agriculture related services, Infrastructure related services
3. Export of goods and services, Goods and Services supplied to and by SEZ (zero rated)
2% (may be somewhat higher) : Gold and silver ornaments, precious and semi-precious stones
5% : Goods of basic necesities, agricultural inputs, Goods and passenger transport services
12% : Essential Medicines and drugs, all industrial and agricultural inputs and some capital goods.
18% : Normal rate on all goods and services, other than those mentioned elsewhere
28% plus GST Compensation Cess : Luxury goods and luxury services
Will be brought in GST at a later stage : Aviation turbine fuel (ATF) and petroleum products (petrol, diesel and motor spirit)
Out of GST : Alcoholic Liquor
CGST and IGST rates will be common all over India. However, SGST rates will be decided by each State and will vary from State to State.
No concept of ‘declared goods : – Concept of ‘declared goods’ will be abolished under GST.