The Group of Ministers (GoM) on GST rate rationalisation has decided to increase tax on aerated beverages, cigarettes,
tobacco
and related products to 35 per cent from the current 28 per cent, an official said on Monday.
“The GoM has agreed to propose a special rate of 35 per cent on tobacco and related products and aerated beverages. The four-tier tax slab of 5, 12, 18, and 28 per cent will continue and a new rate of 35 per cent is proposed by the GoM,” the official told news agency PTI. The GoM, led by Bihar deputy chief minister Samrat Chaudhary, also made decisions regarding tax rates on apparel.
The GoM will suggest tax rate modifications for 148 items to the
GST Council
, with a ” positive net revenue impact,” the official added.
The GST Council, headed by the union finance minister Nirmala Sitharaman and including state counterparts, is scheduled to review the GoM report on December 21. The council will make the final decisions on GST rate alterations and might retain the GoM so that the rationalisation exercise continues periodically, the official further said.
The current GST framework comprises four tiers: 5, 12, 18, and 28 per cent.
Present GOM proposals
- GoM to propose a special rate of 35 per cent on tobacco and related products and aerated beverages.
- The new structure for readymade garments includes 5 per cent GST for items up to Rs 1,500, 18 per cent for those between Rs 1,500 and Rs 10,000, and 28 per cent for garments above Rs 10,000.
- The GST system applies lower rates to essential items, whilst luxury and demerit goods attract the highest rates.
- Additional cess applies to luxury items like cars and washing machines, and demerit goods such as aerated water and tobacco products, above the 28 per cent slab.
Also read: Policyholders to gain from GST rate cut: FM Nirmala Sitharaman
Previous GOM proposals
- During its October meeting, the GoM suggested reducing GST on packaged water (20 litres and above) to 5 per cent from 18 per cent.
- The group also recommended lowering GST on bicycles under Rs 10,000 to 5 per cent from 12 per cent.
- Additionally, exercise notebooks would see GST reduction to 5 per cent from 12 per cent.
- The GoM suggested increasing GST on shoes above Rs 15,000 per pair to 28 per cent from 18 per cent.
- An earlier meeting on October 19 also included a proposal to raise GST on wrist watches above Rs 25,000 from 18 per cent to 28 per cent.
Chandigarh GST collection
The goods and services tax (GST) collection in Chandigarh saw a 20 per cent increase in Nov, 2024 as compared to the corresponding period in the last year. The collection for Nov, 2024 stood at Rs 253 crore, while it was Rs 210 crore in Nov, 2023. The GST collection saw a 16 per cent increase in Oct 2024 than last year, as per reports.
