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Maximum Rate of CGST can be 20%. Maximum Rate of IGST can be 40%

 In order to determine the rate applicable on a particular supply of goods or services, one needs to first determine the classification of such goods or services.


 Classification of goods means identification of the tariff item, sub-heading, heading & chapter in which a particular product will be classified.
 Tariff item, sub-heading, heading & chapters referred in the Schedules of rate notification for goods under GST are the Tariff item, sub-heading, heading & chapters of the First Schedule to the Customs Tariff Act, 1975.
 Indian Customs Tariff is based on HSN. HSN stands for Harmonized System of Nomenclature.
 It is a multipurpose international product nomenclature developed by the World Customs Organization (WCO) for the purpose of classifying goods across the World in a systematic manner.
 It comprises of about 5,000 commodity groups; each identified by a 6-digit code [code can be extended], arranged in a legal & logical structure & is supported by well-defined rules to achieve uniform classification.
 India has developed an 8-digit code of HSN.
 Along the lines of HSN, the Indian Customs Tariff has a set of Rules of Interpretation of the First Schedule & General Explanatory notes. These rules & the general explanatory notes give clear direction as to how the nomenclature in the schedule is to be interpreted. These Rules for Interpretation including section & chapter notes & the General Explanatory Notes of the First Schedule apply to the interpretation of the rate notification for goods under GST also.
 Consequently, under GST, goods are classified on the basis of HSN in accordance with the Rules for Interpretation of the Customs Tariff.
 Once classification for a product has been determined on this basis, applicable rate has to be determined as per the rate prescribed in the rate notification issued under GST

CGST 0% 0.125% 1.5% 2.5% 6% 9% 14%
SGST 0% 0.125% 1.5% 2.5% 6% 9% 14%
TOTAL 0% 0.250% 3% 5% 12% 18% 28%


 A new Scheme of Classification of Services has been devised under GST. It is a modified version of the United Nations Central Product Classification.
 Under this scheme, the services of various descriptions have been classified under various sections, headings & groups. Chapter 99 has been assigned for services. This chapter has following sections:

Section 5  Construction Services.
Section 6  Distributive Trade Services; Accommodation, Food & Beverage Service; Transport Services; Gas & Electricity Distribution Services.
Section 7  Financial & related services; real estate services; & rental & leasing services.
Section 8  Business & Production Services.
Section 9  Community, social & personal services & other miscellaneous services.

 Each section is divided into various headings which is further divided into Groups. Its further division is made in the form of ‘Tariff item’/ Service Codes. Rate of tax is determined as per the Service Code in which the service is classified.
 Gambling Services, Services of admission to entertainment events/sporting event attract 28% GST.
 Services not covered under any specific heading are taxed @ 18% (CGST @ 9% & SGST @ 9%).

CGST 0% 2.5% 6% 9% 14%
SGST 0% 2.5% 6% 9% 14%
TOTAL 0% 5% 12% 18% 28%

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