GST Council Meeting: The GoM on rate rationalisation will propose tax rate tweaks on 148 items to the GST Council
GST Council Meeting: The GoM on GST rate rationalisation on Monday decided to hike tax on sin goods like aerated beverages, cigarettes, tobacco and related products to 35 per cent from the present 28 per cent, an official said.
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GoM Decides on GST Rate Rationalisation for Apparel
The Group of Ministers (GoM) on rate rationalisation under Bihar Deputy Chief Minister Samrat Chaudhary also decided to rationalise tax rates on apparel.
Revised GST Rates for Readymade Garments
As per the decision, readymade garments costing up to Rs 1,500 would attract 5 per cent GST, those between Rs 1,500 and Rs 10,000 would attract 18 per cent. Garments costing above Rs 10,000 would attract 28 per cent tax.
Proposal to Revise Tax Rates on 148 Items
In total, the GoM on rate rationalisation will propose tax rate tweaks on 148 items to the GST Council. “The net revenue impact will be positive,” an official said.
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GoM Report to be Discussed by GST Council
The GoM report is expected to be discussed by the GST Council — chaired by Union Finance Minister and comprising her state counterparts — on December 21. A final decision on GST rate changes will be taken by the council.
Special Rate of 35% Proposed for Tobacco and Aerated Beverages
“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,” said the official.
Existing GST Structure and its Applicability
Currently, GST is a four-tier tax structure with slabs at 5, 12, 18, and 28 per cent.
Under GST, essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury goods like car, washing machine, and demerit goods like aerated water and tobacco products attract cess on top of the highest 28 per cent slab.
Finalisation of GoM Report
The official said the GoM on rate rationalisation has finalised its report on Monday to be presented before the council.
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Continuation of Rate Rationalisation Efforts
The council will now decide whether there is further scope for rate rationalisation and may decide to retain the GoM so that the rationalisation exercise continues periodically, the official added.
Highlights from the Previous GoM Meeting in October
In its last meeting in October, the GoM had proposed:
- Reducing GST on packaged drinking water of 20 litres and above to 5 per cent from 18 per cent.
- Reducing GST on bicycles costing less than Rs 10,000 to 5 per cent, from 12 per cent.
- Reducing GST on exercise notebooks to 5 per cent from 12 per cent.
- Increasing GST on shoes above Rs 15,000 per pair from 18 per cent to 28 per cent.
- Increasing GST on wristwatches above Rs 25,000 from 18 per cent to 28 per cent.
(With agency inputs)
