Frequently Asked Questions (FAQs) on GST
Q1. What are the different GST rates on goods?
Ans. Currently five different GST rates are applicable on goods. These are 0.25% (e.g. cut and semi-polished stones), 5% (e.g. household necessities), 12% (e.g. computers), 18% (e.g. hair oil) and 28% (e.g. aerated drinks)
Q2. What are the different GST rates on services?
Ans. Four different GST rates are applicable on services. These are 5% (e.g. tour operated services), 12% (e.g. air travel except economy), 18% (e.g. outdoor catering) and 28% (e.g. gambling)
Q3. Who decides GST rates?
Ans. GST rates are decided by GST Council. The council has 33 members, including the State Finance Ministers. The Council is headed by the Union Finance Minister.
Q4. What are the various types of GST?
Ans. There are 3 types of GST:
- SGST: It is collected by the state and union territories in case of an intra-state transaction. For example, when a good is both manufactured and sold within Gujarat, SGST will be levied by the Maharashtra government.
- CGST: It is collected by the Central government in case of an intra-state transaction. In the above example, CGST will be levied, in addition to SGST, by the Central government.
- IGST: IGST or Integrated GST is levied by the Central government when the location of a supplier of the good/service and the place of consumption lie in different states. The IGST so collected is subsequently divided between the State and Centre.
Q5. What is the GST rate on water and water-based products?
Ans. Four different GST rates are applicable on water and water-based products. These are 5%, 12%, 18% and 28%. It should be noted that no GST is levied on water, when not sold in sealed containers.
Read more about GST on Water-based products.
Q6. What is the difference between Nil GST and GST Exempt goods and services?
Ans. Nil GST means no GST or zero GST is applicable on the goods and services. On the other hand, GST exempt goods and services refer to the goods and services which may have a higher GST rate but have been temporarily exempted from GST.
Q7. What are the different GST rates on hotel accommodation?
Ans. Following are the updated GST rates on hotel accommodation, as per the 37th GST Council Meeting.
|
Transaction Value per unit per day (Rs.) |
GST Rate |
|---|---|
|
Rs. 1000 and less |
Nil |
|
Rs. 1001 to Rs. 7500 |
12% |
|
Rs. 7501 and more |
18% |
Q8. What is the GST rate on gold?
Ans. GST rate on gold as a good is 3%. Additionally, 5% GST is levied on making charges of the gold ornaments.
Read more about GST on gold.
Q9. Is GST Compensation Cess same as GST rate?
Ans. GST rate implies the rate at which GST is applicable on goods and services. It should be noted that GST is charged at each step of value addition and depends on the destination of consumption. For instance, if a good is manufactured in state A but consumed in state B, then the revenue generated through GST collection is accredited to the state of consumption (state B) and not to the state of production (state A).
As a result manufacturing states may suffer a revenue loss owing to the consumption-based nature of GST. Thus, GST Compensation Cess or GST Cess was introduced on certain goods to compensate for the possible revenue losses suffered by such manufacturing states. However, it will be levied only for the first 5 years of GST regime that is from July 1st, 2017 to July 1st, 2022.
Q10. What is the GST rate for hospital services?
Ans. Both human health care services and veterinary medicals services are included in the GST Act. As per the existing rules, there is no GST on health care services provided by an authorized medical practitioner, licensed medical or paramedical clinic. Similarly, there is nil GST on health care services provided to birds/animals at authorized clinics.
Read more about GST on Medicines and Medical Supplies
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