One of the most common questions from Kolkata business owners is: “What GST rate applies to my product or service?” GST in India operates on a multi-slab rate structure — 0%, 5%, 12%, 18%, and 28% — along with special rates for certain goods like gold and precious stones. Understanding the correct GST rate for your business is critical, as charging the wrong rate can lead to tax demands, penalties, and loss of ITC for your customers.
The GST Rate Structure at a Glance
Zero-rated (0%): Essential items like fresh fruits, vegetables, milk, eggs, bread, and books are exempt from GST or taxed at nil rate. This is especially relevant for Kolkata’s vegetable markets like Gariahat and Maniktala Bazar.
5% GST Rate: Items like packaged food products, tea, coffee (not branded), edible oils, and certain fabrics fall under the 5% slab. Many textile traders in Burrabazar deal in items that attract 5% GST.
12% GST Rate: Processed foods, computers, mobile phones, printed books, and business class air travel attract 12% GST. Kolkata’s growing IT and electronics retail sector largely falls under this bracket.
18% GST Rate: This is the most common slab and applies to a wide range of goods and services including restaurants (with AC), real estate services, IT services, banking and financial services, construction services, and most manufactured goods not specifically listed elsewhere. A large number of Kolkata’s service sector businesses — from advertising agencies in Park Street to IT companies in Salt Lake’s Sector V — fall under 18% GST.
28% GST Rate: Luxury goods, automobiles, tobacco products, cement, and air conditioners attract the highest 28% GST rate. Additionally, some items under this slab also attract GST Compensation Cess.
GST on Real Estate in Kolkata
Real estate is one of Kolkata’s biggest industries. Under GST, under-construction properties attract 5% GST (without ITC) for regular housing, and 1% for affordable housing projects. However, completed, ready-to-move-in properties where the Occupancy Certificate (OC) has been issued are NOT subject to GST — only stamp duty applies. This distinction is very important for both developers and home buyers in Kolkata.
GST on Restaurants and Food Businesses in Kolkata
Kolkata is famous for its food culture. GST on restaurant services depends on the type of restaurant: Non-AC restaurants charge 5% GST without ITC. AC restaurants also charge 5% GST (the earlier 18% rate for AC restaurants was reduced). Restaurants in starred hotels (where room tariff exceeds ₹7,500 per night) attract 18% GST. Street food vendors and small eateries with turnover below ₹20 lakhs are generally outside the GST ambit.
GST on the Jute Industry in Kolkata
West Bengal and Kolkata are at the heart of India’s jute industry. Raw jute attracts 0% GST, while jute yarn and jute bags attract 5% GST. Jute carpets and jute-based floor coverings attract 12% GST. This industry-specific knowledge is essential for jute traders and manufacturers in and around Kolkata’s jute mill belt along the Hooghly river.
How to Check GST Rates
You can verify the correct GST rate for any product or service using the HSN (Harmonized System of Nomenclature) code lookup on the GST portal at www.gst.gov.in. Always consult a qualified GST practitioner or CA in Kolkata if you are unsure about the applicable rate for your specific products or services — incorrect classification is one of the most common causes of GST disputes and demands.