GST Rate structure

GST Rate structure

Subject :Economy

Context:

A Group of Ministers, under the convenorship of Chief Minister of Karnataka Basavaraj SomappaBommai, is going through rate reform exercise.

Interim report-

3-rate structure by adopting 8, 15 and 30 per cent for revenue neutrality.

Concept:

• Over 1,200 goods and services except those in negative list attract GST.
• Four primary GST rates: 5, 12,18 and 28 per cent.
  • The 28 per cent slab in GST contributes 16 per cent to the gross GST revenue, while the major chunk of 65 percent comes from the 18 percent slab.
  • The slabs of 5 per cent and 12 per cent contribute 10 per cent and 8 per cent of the total gross GST revenue, respectively.
• Some special rates such as 0.25 per cent, 1.5 and 3 per cent.
• Some of the items are in NIL rates.
  • This type of supply attracts a GST of 0%.
  • Input tax credit cannot be claimed on such supplies.
  • Example-grains, salt, jaggery, etc.
• Some items are Exempted.
  • This supply includes items which are used for everyday purposes.
  • They are basic essentials, and do not attract any GST at all.
  • Input tax credit cannot be claimed on such supplies.
  • Some examples include bread, fresh fruits, milk, curd, etc.
• Some items are Zero-Rated
  • Supplies made overseas and to Special Economic Zones (SEZs) or SEZ Developers come under the zero-rated supplies.
  • This supply attracts a GST of 0%.
  • Input tax credit can be claimed on such supplies.
• Some items of goods are also considered Non-GST
  • Supplies which don’t come under the scope of the GST are termed as Non-GST supplies.
  • These supplies can attract taxes other than the GST as per the jurisdiction of the state or the country.
  • Some examples of such supplies include alcohol for human consumption, Petroleum products such as petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel etc., electricity has been kept outside the purview of GST at present.