Last updated: March 15th, 2023 4:58 PM

What is the maximum limit of GST rate?

GST (Goods and Services Tax) is a multi-stage, destination-based taxation system applied to almost all goods and services in India. It has replaced several indirect taxes levied by the State and Central government and has been effective since 1st July 2017. The GST rate is a crucial aspect of the taxation system, as it affects how much taxes consumers, businesses and other entities pay. This article talks about the various types of GST rates and the maximum limit of GST rates, which is 28%.

What are the Types of GST Rates?

There are four types of GST rates in India: 0% (nil-rated), 5%, 12%, 18% and 28%. Some goods and services fall under the category of 28% GST, which is the maximum GST rate limit.

What is the GST Rate Structure in India?

India has a multi-tiered system for calculating the Goods and Services Tax (GST). GST in India is applicable at various rates ranging from 0% to 28%. The GST rate structure for goods and services is as follows:

GST Rates for Goods:

• Nil Rate: Essential goods such as food items, agricultural equipment, etc are exempt from GST.
• 5%: Items of daily use, including edible oil, soaps, toothpaste, etc.
• 12%: Processed foods, electronics, and other items.
• 18%: Items like mobile phones, furniture, hair oil, footwear, etc.
• 28%: Cars, automobile spare parts, white goods, tobacco products and other high-end products.

GST Rates for Services:

• Nil Rate: Health care, education, and transportation services are exempt from GST.
• 5%: Services such as train tickets, financial services, etc.
• 12%: Services such as air travel, hotel accommodation, telecom services etc.
• 18%: Services such as restaurant services, etc.
• 28%: Certain services such as legal services.

Additionally, a 3% cess is levied on certain luxury items such as cars, SUVs, and aerated drinks.

What is the maximum limit for GST rates in India?

The highest GST rate limit was set at 28% by the GST Council of India. This is the maximum rate under the GST regime and applies to goods and services considered luxury items. Everyday items that fall under this rate include cars, tobacco products, aerated drinks and air travel. In conclusion, the highest limit of the GST rate in India is 28% and applies to luxury items and some common items.  The GST rates for goods and services are decided by the GST Council based on various factors and are reviewed regularly by the GST Council. The Council can change the rate for specific items depending on the demand and supply of the product or service and other economic factors. The GST Council also has the power to reduce or increase the GST rate for certain goods and services. Click here for the official guide on GST rates for Goods and Services.