Updated GST Rates for 2021-2022

The impacts of the global pandemic have brought in certain changes in the whole financial setup of India, much like any larger nation. A revised set of regulations and reforms were introduced with new GST rates for the remaining year of 2021 and for the financial year of 2022.

Whether it be MSME loans, vendor financing, commodities or even the day-to-day resources, all were addressed in the 45th session of the GST council held in Lucknow for the renewal of GST rates in India. It is to be addressed further now to better understand the values of Goods and Services Tax in India and how it will influence businesses.

This article will elucidate upon GST slabs and the current GST rate in India. It will also expand upon new GST rate changes as on this article’s date of publishing.

GST Slabs in India and GST Rates Chart

Let’s understand what GST is to better our understanding of the GST rates list.

The Goods and Services Tax (GST) is an indirect tax levied on goods and services purchased in India. With the exception of a few state taxes, GST has absorbed all other indirect state and central taxes. As a result, it is a multi-staged and all-encompassing tax. It replaced the previous point-of-origin taxation policy with a point-of-destination or consumption taxation policy. Because it is a multi-stage tax, it is levied at each stage of production, but it is refunded to all parties involved in production except the final consumer.

The revenue from an intra-state business transaction is split 50-50 between the centre and the state. For example, if Maharashtra earns Rs. 10 crores in tax revenue, the state keeps Rs. 5 crores while the central government receives Rs. 5 crores. The GST Act grants the state the authority to import goods or services in order to collect the tax in any interstate transaction involving the movement of goods and services across state lines. Consider the following scenario: In an inter-state transaction, goods are exported from Maharashtra to Gujarat. In this case, Gujarat is the state that receives the goods and collects the taxes, which are then divided equally among the centre and state.

There are 4 extant GST slabs in India, 5%, 12%, 18% and 28%. There’s also the 0% exemption slab used in financial accounting. We’ll list all the basic goods and services falling under these latest GST rates in India. Further on, we will also inform you about the various exemptions and additions made to the new GST rate by the GST council.

Slab Rate of GST Revision in 23rd GST Council Meeting

The 23rd GST council meeting convened on the 10th of November 2017 and made several changes. One of them was that GST Rates for 178 items were reduced from 28% to 18%. Here are some of the modifications made in the GST law in this meeting:

• The GST rate for manufacturers and traders under the composition scheme is 1%.
• Decreased from 28% to 18%: Shampoo, perfume, tiles, and watches as of November 15th, 2017.
• The proportion of wet grinders and tanks has been reduced from 28% to 12%.
• The GST rate of condensed milk, refined sugar, and diabetic food reduced from 18% to 12%.
• The percentage rate of desiccated coconut, idli dosa batter, and coir products has been reduced from 12% to 5%.
• The percentages of duar meal, khandsari sugar, and dried vegetables have been reduced from 5% to 0%.
• The GST rate is 5% for restaurants within hotels and rooms with a room tariff of less than Rs. 7,500.

GST Rate Revision in Services

Here is a list of services exempt:

1. The Coal Mines Provident Fund Organization is the organisation that serves PF subscribers.
2. For a fee of up to Rs. 25000, state or central government-run old age homes provide services to citizens over the age of 60.
3. The National Pension System Trust charges an administrative fee that is GST-free.
4. An unincorporated body or a non-profit organisation registered under any law provides services to its members for a fee of up to Rs. 1000 per year.
5. Artificial insemination services for livestock (other than horses).
6. The Food Safety and Standards Authority of India (FSSAI) provided services to the food industry.
7. DISCOMS provided installation and commissioning services for the agricultural extension of the electricity distribution network.
8. Insurance schemes such as the Pradhan Mantri Rashtriya Swasthya Suraksha Mission benefit from reinsurance services.
9. The central and state governments provide guarantees to their undertakings/PSUs.The government provides services to ERCC by granting mining leases and holds the right to collect royalties.
10. Services imported by foreign diplomatic missions, the United Nations, and other international organisations.
11. The actual rate for hotel services will be subject to GST rate slabs rather than the declared tariff.
12. Basic Savings Bank Deposit (BSBD) account holders under the Pradhan Mantri Jan Dhan Yojana (PMJDY).
13. Rehabilitation professionals licenced under the Rehabilitation Council of India Act, 1992 who provide services at government-run hospitals, schools, rehabilitation centres, and charitable organisations registered under Section 12AA of the Income Tax Act, 1961.
14. Government provided loan guarantee services to its undertakings and PSUs for bank loans.

Conclusion

These are all the updated GST rates that are extant in the market. Knowledge of these rates will help any business file its GST returns accurately. Small businesses have a lot of working capital needs. FlexiLoans is an India-based non-banking financial institution that provides online business loans to all SMEs and MSMEs. It offers instant business loans with no collateral required, as well as competitive interest rates and terms.