Question 1

What is GST?

Accepted Answer

GST (Goods and Services Tax) is a comprehensive indirect tax on the supply of goods and services in India.

Question 2

What are the GST rates (as per September 2025 reforms)?

Accepted Answer

The new simplified GST structure (effective September 22, 2025) has three main rates: 5% for essential goods and services, 18% as the standard rate for most goods and services, and 40% for luxury and sin goods. Some items like individual life and health insurance policies are exempt (0%).

Question 3

What goods fall under 5% GST rate?

Accepted Answer

Essential goods at 5% include: toothpaste, shampoo, soaps, packaged food items, tea, coffee, spices, edible oils, sugar, salt, medicines, medical devices, transport services, and non-AC restaurants. These were reduced from 18% to 5% in September 2025 reforms.

Question 4

What goods fall under 18% GST rate?

Accepted Answer

Standard rate (18%) applies to: consumer electronics (ACs, TVs, refrigerators, washing machines), small cars, motorcycles, processed foods, clothing, footwear, furniture, hotel services (AC), IT services, financial services, telecom services, and most other goods and services not covered under other categories.

Question 5

What goods fall under 40% GST rate?

Accepted Answer

Luxury & sin goods at 40% include: cigarettes, pan masala, gutkha, tobacco products, high-capacity cars (above specified engine capacity), luxury vehicles, aerated drinks, and other luxury items as notified by GST Council. This rate replaced the previous 28% rate for luxury items.

Question 6

What goods are exempt from GST (0%)?

Accepted Answer

Exempt items (0%) include: individual life insurance policies, individual health insurance policies, fresh fruits and vegetables, unprocessed food grains, educational services, healthcare services, and other items as notified by GST Council.

Question 7

How is GST calculated?

Accepted Answer

GST = (Base Amount × GST Rate) / 100. The total amount includes base amount + GST.

Question 8

What is the difference between CGST, SGST, and IGST?

Accepted Answer

CGST and SGST are for intra-state transactions, while IGST is for inter-state transactions.

Question 9

Is GST applicable on all goods and services?

Accepted Answer

Most goods and services are subject to GST, but some essential items are exempt or have lower rates.

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