GST Tax Slabs

Definition

The set of standard rate brackets under the Goods and Services Tax, into which goods and services are classified so that essentials are taxed low and luxury or "demerit" goods are taxed high.

Key points

• The core GST rate structure has multiple slabs (broadly 0, 5, 12, 18 and 28 percent), with a nil or exempt category for many essentials; verify the latest slabs as the GST Council revises them.
• A compensation cess is levied over and above the top slab on certain luxury and "sin" goods (such as tobacco, aerated drinks, and some automobiles).
• Gold and rough diamonds attract special low rates outside the main slabs.
• Slab decisions are taken by the GST Council (Article 279A), where the Centre and states vote together; see concept gst.
• Items still outside GST include petroleum products, alcohol for human consumption, and electricity duty.

Why it matters for CAPF

The number and broad values of slabs, the compensation cess on demerit goods, and the GST Council's role in setting rates are common indirect-tax facts.

Common confusion

The 28 percent slab is the standard top rate, but the compensation cess pushes the effective burden on luxury and sin goods higher; exempt (nil-rated) is not the same as zero-rated (zero-rated allows input credit, typically on exports).

Parent note

taxation and gst