What are different GST Tax Rates for an online seller? How are they applied?

Under the Goods & Services Tax Act (GST), products from each category have been placed in one of the 4 different Tax Slabs.

Watch the video to better understand “GST Tax Slabs”-

For online sellers, the 4 Tax Slabs for their goods/products are-

  1. Exempted Goods – 0% Tax is applicable
  2. Commonly Used Goods – 5% Tax is applicable
  3. Standard Goods – 12% or 18% Tax is applicable
  4. Luxury Goods – 28% Tax is applicable

Important thing to note for Online Sellers is- From 1st July, 2017, every product sold you have to collect GST Tax Rate in accordance to the Tax Slab your product falls in.

Let us look at some of the popular product categories that are sold by online sellers and their applicable GST Tax Rate-

  1. Shoes
    • Shoes below Rs. 500 – 5% Tax is applicable
    • Shoes above Rs. 500 – 18% Tax is applicable

(Note about additional shipping charges- Online Sellers, if you are selling shoes for Rs 450 & additional shipping charge is Rs 70, then total is Rs 520 & 18% Tax is applicable)

  1. Garments such as Saree, Suits, Lehenga, Dress, Shirts, Pants, T-shirts, Jeans etc
    • Garments below Rs. 1000 – 12% Tax is applicable
    • Garments above Rs. 1000 – 18% Tax is applicable
  2. Watches – 28% Tax is applicable
  3. Spectacles & Sunglasses – 12% Tax is applicable
  4. Mobile Phones – 12% Tax is applicable
  5. Cosmetic Products – 28% Tax is applicable
  6. Artificial Jewellery – 3% Tax is applicable

As an online seller, you might be selling products in a mix of categories which might or might not have been covered here. Don’t worry !

We at Shop101 are working to make your transition to GST as smooth as possible. We will be releasing more informative videos on GST in coming days. Please subscribe to our YouTube channel so that you don’t miss future updates.

Upcoming:  How to find out applicable tax rate under GST Product Classification (HSN Codes) for your products.

To know about what is GST,  read our previous post on What is GST?

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