In India, Goods and Service Tax (GST) is levied on customers before being remitted to the government by the business. The percentage of tax that a customer needs to pay varies based on the items sold by the business. Zakya helps keep businesses GST-compliant.
The common GST tax rates that are followed in India are:
| Tax Rate | Products |
|---|---|
| Nil | Fruits, vegetables, bread, salt, curd, honey, news papers, stamps, etc. |
| 5% | Coffee, coal, fertilizers, insulin, ayurvedic medicine, etc. |
| 12% | Mobile phones, butter, cheese, ghee, fruit juices, etc. |
| 18% | Washing machines, refrigerators, televisions, cakes, pastries, etc. |
| 28% | Automobiles, yachts, weighing machine, ceramic tiles, etc. |
GST is categorized into CGST, SCST, and IGST and is applicable whether a transaction is carried out within a state or across state lines.
CGST: Central Goods and Service Tax
This is the tax collected by a business from a customer to be paid to the Central Government. It is applicable only in intra-state transactions.
SGST: State Goods and Service Tax
This is the tax collected by a business from a customer to be paid to the State Government. It is applicable only in intra-state transactions.
IGST: Integrated Goods and Service Tax
This is applicable only for inter-state transactions, and the tax will be shared between the Central and the State Government.
Intra-state Transactions
The transactions completed within a state fall under this category. In this case, both CGST and SGST will be collected by the supplier from the customer.
For example, a computer is sold by a supplier in Chennai to a customer in Chennai. A total of 12% GST will be levied on the customer. It comprises of 6% CGST + 6% SGST.
Inter-state Transactions
The transactions completed between two states fall under this category. In this case, only IGST will be collected by the supplier from the customer. This tax will be divided between the Central government and the government of the state in which the customer purchased the item.