GST Rates

Tax & Deductions

GST (Goods and Services Tax) in India has five rate slabs: 0%, 5%, 12%, 18%, and 28%. Essential goods are taxed at 0-5%, regular goods at 12-18%, and luxury/sin goods at 28% (with additional cess). Understanding GST rates helps with budgeting and business pricing.

In detail

GST rate examples:n0%: fresh vegetables, milk, curd, eggs, unbranded rice, medical services, educationn5%: processed foods, domestic LPG, small restaurantsn12%: packaged food, business class air travel, most medicinesn18%: most manufactured goods, telecom, banking fees, restaurant dining (most), IT servicesn28%: cars, motorcycles above 350cc, tobacco, cement, air conditioners, casinos/lotterynnSpecial: petrol, diesel, alcohol are NOT under GST (state levies continue).nnFor consumers: GST on final price = purchase price already includes GST. IGST applies on interstate transactions; CGST + SGST on intrastate.

Formula

GST amount = Value of supply x GST ratenPrice to consumer = Base price + GST amountnIGST = CGST + SGST (same rate, different collection)

Real-life example

🇮🇳 India example

Meena buys a laptop for Rs 80,000 (18% GST). GST = Rs 14,400 included in Rs 80,000 (or added on top if price shown exclusive). Business with GST registration can claim Rs 14,400 as Input Tax Credit if laptop used for business. Individual consumer cannot reclaim -- it is a final tax.

Frequently asked questions

Why are petrol and diesel not under GST? ▼

Political/revenue reason: central + state taxes on petrol/diesel are a major revenue source for both central and state governments. Including them in GST at uniform 28% rate would force both to share revenue through GST council -- reducing states' independent taxation power. Despite consumer demand, petroleum GST inclusion has been deferred indefinitely.