• Wed. Jun 12th, 2024

    GST India 2023: The Ultimate Impact on You

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    The Goods and Services Tax (GST) is a comprehensive indirect tax reform that has subsumed several state and central taxes in India. It was introduced in 2017 and has undergone several changes since then. The GST Council, which is the apex body for deciding the GST rates and rules, meets periodically to review and revise the GST structure.

    In this article, we will give you the latest updates on the GST India slab revised in 2023, as well as some of the key changes that have taken place in the GST regime in the past year.

    GST India Rates in 2023

    The GST rates in India in 2023 are categorized into four different GST slabs: 5%, 12%, 18%, and 28%. Goods and services are taxed at different rates based on their nature, category, and usage. There are also some items that are exempt from GST or attract a lower or higher rate of cess.

    The following table shows the GST rates for some of the commonly used consumable products in India:

    ProductGST Rate
    Milk0%
    Sugar5%
    Tea5%
    Butter12%
    Soap18%
    AC28%
    Cigarette28% + cess
    You can find the complete list of GST rates for all goods and services on the official website of the Central Board of Indirect Taxes and Customs (CBIC) here.

    GST Rate Changes from 1st January 2023

    The GST Council, in its 45th meeting held on December 17, 2022, approved some major changes in the GST rates and rules, which came into effect from January 1, 2023. Some of the highlights of these changes are:

    • The government has raised the GST rate on items such as clothes, textiles, and footwear from 5% to 12%. This is expected to generate additional revenue for the government and also reduce the inverted duty structure problem in these sectors.
    • The government has reduced the GST rate on items such as fertilizers, pesticides, tractors, and agricultural machinery from 18% to 12%. This is aimed at providing relief to the farmers and boosting the agricultural sector.
    • The government has also slashed the GST rate on items such as electric vehicles, solar panels, LED lights, and biogas from 18% to 5%. This is intended to promote green energy and reduce pollution.
    • The government has exempted items such as sanitary napkins, menstrual cups, and tampons from GST. This is a welcome move for women’s health and hygiene.

    GST Rules Revised in 2023

    Apart from the GST rate changes, the GST Council also approved some amendments in the GST rules and procedures in its last meeting. Some of these are:

    • The GST rate for clothes, textiles, and footwear increased from 5% to 12%
    • The GST rate for fertilizers, pesticides, tractors, and agricultural machinery decreased from 18% to 12%
    • The GST rate for electric vehicles, solar panels, LED lights, and biogas decreased from 18% to 5%.
    • The GST rate for sanitary napkins, menstrual cups, and tampons became 0%.
    • The GST rate for COVID-19 vaccines, oxygen concentrators, ventilators, and pulse oximeters became 0%.
    • The government has extended the deadline for filing annual returns and audit reports for FY 2021-22 till March 31, 2023. This is to give more time to taxpayers to comply with the requirements amid the COVID-19 situation.
    • The government has also extended the validity of e-way bills till June 30, 2023. This is to facilitate the movement of goods across states without any hassle.
    • The government has introduced a new rule to curb fake invoicing and tax evasion. Under this rule, any taxpayer who has not filed GSTR-3B for two consecutive months will not be able to generate e-invoices or e-way bills. This will ensure that only genuine taxpayers can avail of the benefits of GST.
    • The government has also simplified the GST registration process for new taxpayers. Now, they can register online using their Aadhaar number and OTP verification. This will reduce the paperwork and time involved in getting a GST number.
    ItemOld GST RateNew GST Rate
    Clothes5%12%
    Textiles5%12%
    Footwear5%12%
    Fertilizers18%12%
    Pesticides18%12%
    Tractors18%12%
    Agricultural Machinery18%12%
    Electric Vehicles18%5%
    Solar Panels18%5%
    LED Lights18%5%
    Biogas18%5%
    Sanitary Napkins12%0%
    Menstrual Cups12%0%
    Tampons12%0%
    COVID-19 Vaccines5%0%
    Oxygen Concentrators12%0%
    Ventilators12%0%
    Pulse Oximeters12%0%

    Conclusion

    The GST regime in India is constantly evolving to suit the needs of the economy and society. The latest changes in the GST rates and rules reflect the government’s efforts to balance revenue generation, consumer welfare, and sectoral growth. As a taxpayer or a consumer, you should keep yourself updated with these changes and comply with them accordingly.


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