Govt notifies revised CGST rate schedules, effective September 22

The Finance Ministry has notified revised CGST schedules covering seven categories of goods, effective September 22, with States set to issue matching SGST notifications

The government on Wednesday notified a revised schedule of central goods and services tax (CGST) rates, superseding the original 2017 schedules. The notification issued by the finance ministry will come into force on September 22. The changes cover seven schedules, with CGST rates notified at 2.5, 9, 20, 1.5, 0.125, 0.75 and 14 per cent. States will separately issue their own notifications for the state goods and services tax (SGST) at the same rates.

 

Under the new framework, Schedule I items will attract 2.5 per cent CGST, meaning a total levy of 5 per cent once the SGST component is added, as the two are charged in equal proportion. This schedule largely covers essential commodities and primary goods, including dairy products such as milk powder, yoghurt, butter and ghee; packaged food grains and cereals such as rice, wheat and pulses; as well as spices, tea, coffee, dried fruits, nuts, honey, edible oils, medicines, fertilisers, soaps, toothpaste, incense sticks and renewable energy devices such as solar panels, windmills and biogas plants.

 

Schedule II attracts 9 per cent CGST (18 per cent GST), applying to a broader set of industrial inputs, intermediate goods, textiles and consumer products. Goods under Schedule III attract 20 per cent CGST (40 per cent GST). This schedule covers luxury and demerit items such as aerated waters and energy drinks, high-end passenger cars and SUVs, hybrid vehicles above specified engine capacity, motorcycles exceeding 350 cc, personal-use aircraft, yachts and revolvers and pistols. It also includes actionable claims by way of betting, casinos, horse racing, lottery and online money gaming. 

 

Schedule IV specifies 1.5 per cent CGST (3 per cent GST) for pearls, gold, silver and jewellery, while Schedule V prescribes the lowest rate of 0.125 per cent CGST (0.25 per cent GST) for precious stones and diamonds. Schedule VI sets 0.75 per cent CGST (1.5 per cent GST) for certain specialised inputs, while Schedule VII notifies 14 per cent CGST (28 per cent GST) on tobacco-related products.

 

“As rate notifications are now being released, it is imperative for industries to align their ERP systems, pricing decisions and supply chain. This strategic alignment is critical to ensure a smooth implementation and, crucially, to guarantee that the benefits of this rate rationalisation are effectively passed on to the end consumer,” said Saurabh Agarwal, partner, EY.