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February 23, 2023
By
Paramita

Decoding Definitions of Goods and Services under Revised Model GST Law

Goods and Services Tax (GST) is one of the biggest tax reforms in India. The GST Council revised the GST law recently, and it is essential for business owners and startup founders to keep up with these changes. In this article, we will decode the definitions of goods and services under the revised model GST law.

What are Goods?

Goods are any movable property that can be bought, sold, or exchanged in the market. These include all kinds of tangible products, such as raw materials, finished goods, and even animals. Goods also include all the components, parts, and accessories that are used to manufacture or assemble a product.

Under the revised GST law, goods are classified into three categories:

  • Essential Goods: These are goods that are essential for daily living, such as food, medicine, and clothing. The GST rate for essential goods is 0%.
  • Luxury Goods: These are goods that are not essential for daily living but are considered luxury items. These include high-end cars, jewelry, and designer clothing. The GST rate for luxury goods is 28%.
  • Other Goods: These are goods that do not fall under the essential or luxury categories. The GST rate for other goods is 18%.

What are Services?

Services are any activities that are performed for a fee. These include professional services, such as legal and accounting services, as well as non-professional services, such as housekeeping and repair services. Services also include intangible products, such as software and intellectual property.

Under the revised GST law, services are classified into three categories:

  • Exempt Services: These are services that are exempted from the GST. Examples of exempt services include healthcare, education, and public transportation.
  • Standard-rated Services: These are services that are subject to the standard GST rate of 18%.
  • Special-rated Services: These are services that are subject to a special GST rate. The special rate for services is 12%, and it is applicable to services such as transportation of goods and passengers.

Conclusion

Understanding the definitions of goods and services under the revised model GST law is crucial for small and medium business owners and startup founders. It helps them comply with the new regulations and ensures that they do not face any penalties for non-compliance. With this article, we hope that you have gained a better understanding of the definitions of goods and services and how they are classified under the revised GST law.

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