Following are the Category of Goods under GSTs two slab structure. They are 1) Merit rate items 2) Standard goods and services.
Merit rate:-
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Standard goods and services:-
Applicable Rate is 5% and Covers everyday essentials with a little processing.
Purpose of keeping them at 5% is to make them affordable to common public.
Example of items covered: packaged food items, health care products, agricultural inputs,household groceries, insurance and financial services, premium transport services.
Basically everyday modern living items. Applicable Rate is 18% and covers most regular consumer products and professional services that do not fall under essential (merit goods) or sin goods.
Example of items covered: Consumer durables,electronics,construction materials,industrial products, financial services, hospitality services, professional services, transport services,packaged goods and beverages.
Additionally, there are other special rates includes
Nil Rate (0%):
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Special Niche Rates:
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Luxury or sin goods category
Nil rate items are those that are taxable but attract 0% GST rate. Applies to items straight from nature or survival items, such as fresh agriculture produce, basic survival foods, most life saving medicines, live animals and public welfare essentials like printed Educational materials, non-AC public transport.
Purpose of keeping them at 0% is to make essentials completely tax free.
Specific rates of 3% for gold and 0.25% for rough precious and semi-precious stones continues to exist.
Applicable Rate is mostly 28% + compensation cess. Purpose of keeping them at 28% is to discourage consumption of sin goods and raise revenue from luxury goods .
Example of items covered: a) Harmful goods like Tobacco products, Alcoholic beverages, Aerated and sugary drinks and b) Luxury goods like Luxury cars and SUVs, high end consumer goods, expensive electronics, Yachts, private aircraft, golf carts.