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GST Classification


August 21, 2020

GST Classification

GST Classification

GST classification is the diverse broad categories into which goods and services are categorized, taking into consideration certain specific set of factors.

Goods and services are meant to fulfill the needs and wants of the people. Goods and Services Tax (GST) which is a tax imposed on different types of goods and services and GST classification is one wide stream coming under GST. GST is an important tax restructuring that has helped in large scale benefits for the Indian economy. GST has also heightened foreign investments in Indian economy. GST registration is a mandatory policy for businesses which supplies goods and services. If a company fails to register under GST, heavy penalties will be imposed on the defaulter on par with the GST act.

Classification of goods and services under GST mainly falls under 3 heads namely:

What is GST Classification of Common Items?

Specific tax rates are fixed for different GST categories. The GST items list of common goods and services are listed below:

GST Items List Tax Rates

Edible oil, spices, sugar, tea and coffee, and other households except instant food packs, Coal, Indian Sweets, Lifesaving Drugs, and medications

5%
Computers and their accessories, processed and instant food products 12%
Toothpaste, hair oils, soaps, cleaners, industrial intermediaries, and capital goods 18%
Cars, luxury bikes, ACs, refrigerators, electrical goods, cigarettes, aerated drinks, and other such luxury items 28%

   

GST Classification of other Goods

GST list of goods and services are many different types. Let us have a look on the classification of services under GST and the GST list of goods considered for GST category consideration.

GST List of Goods based on Free Goods & Economic Goods

Free goods are natural things like air, water, sea, desert sand, sunlight etc. have unlimited supply and are free gifts of nature- people do not have to pay anything to procure these goods. 

Economic goods are vegetables, minerals, grains, fruits, fishes and man-made or unlimited supply of nature and these goods can be procured by the public for specific prices.

Classification of Services under GST based on Free Services & Economic Services

Free Services cannot be bought in the market like services rendered by parents to their children. 

Economic services can be bought from the market and are usually provided by doctors, lawyers, teachers, cobblers and other similar services providing professionals.

GST List of Goods based on Consumer Goods and Capital Goods

Goods that are consumed directly by the consumer are called Consumer Goods. Example: Fish, eggs, bread, butter, jam, biscuit, fan, shirts, books, pen, cooking gas etc.

Goods that are not directly consumed by the consumer but for further production are called Producer Goods. Example: seeds, fertilizers, machines, tools, raw materials etc.

Classification of Services under GST Consumer Services & Producer Services

Services that are directly consumed for satisfying wants of the consumer are called Consumer Services. Producer Services are services used by producers to produce other goods and services. When a consumer directly gets his shirt stitched from a tailor is a consumer service, whereas the tailor stitching shirt for a textile shop is producer service.

GST Items List based on Single-Use & Durable Use Goods

Consumer goods and producer goods which are consumable only one single time are called Single Use Goods like bread, milk, fruits, vegetables, seeds, fertilizers, raw materials etc.

Durable use goods are usable for a considerable time period for continuous usage like table, chair, clothes, shoes, hand, tub wells, tractors, pump sets etc.

GST Items List based on Private Goods & Public Goods

Goods owned by private bodies are called private goods like cars, houses, motorbikes, phones and other similar private goods.

Goods collectively owned by the society, public or government are called Public goods. Roads, government schools, hospitals, bridges etc. are examples of public goods.

GST Categories are extensive and the exact record which depicts classification of goods and services under GST has been gazette published by the government of India.

GST Classification of Other Goods in Specific

Item Tax Rates
  • Sanitary napkins
  • Salt
  • Cereal grains like barley, wheat, oat, rye etc.
  • Palmyra Jaggery
  • Picture, coloring and drawing books for children
  • Di-calcium Phosphate animal feed grade with ISO 5470:2002
  • Preserved and brined vegetables unsuitable for immediate consumption
  • Music books and manuscripts
  • Kajal (except kajal pencil sticks)
  • Dressed, bleached, thinned or in any ways worked human hair
  • Bones and horn chores
Nil
  • Motor car rented
  • Railway mode of transport of goods and passengers
  • Air transportation
  • Tour operator services
  • Print media
  • Leasing of aircrafts
5%
  • Transportation of goods in containers from 3rd parties
  • Food & beverages from non-AC restaurants or restaurant with no liquor license
  • Chit Fund Services
  • Accommodation with rent >Rs.1000 and <Rs.2500
  • Movies tickets< Rs.100
  • Building constructed for sale
  • Temporary IP rights
12%
  • Food & beverages from AC restaurants or restaurant with liquor license
  • Accommodation with rent >Rs.2500 and <Rs.5000
  • Supply of food and party organizing
  • Movies tickets> Rs.100
  • Circus, theatre, drama, folks etc.
  • Supply for a work contract
  • Outdoor catering
18%
  • Gambling
  • Race club services
  • 5 star or above rent accommodation
  • Amusement facilities, water parks, theme parks, race courses, go carting, casinos, ballets and sporting events like IPL
28%

 

For more about GST

  1. What is GST Framework?
  2. Types of GST - CGST, SGST and IGST
  3. Current GST Return due dates

 

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