GST To Go Up 35% On These Products? Group Of Ministers Bats For Rationalisation - Read More

The Group Of Ministers (GoM) under Bihar Deputy Chief Minister Samrat Chaudhary recommended GST rate rationalization on Monday. The GoM proposed a hike in GST on ‘sin goods’ like aerated beverages, cigarettes, tobacco, and related products to 35 per cent from the present 28 per cent, an official said. Under the proposed rate rationalisation, the GoM also recommended revising tax rates on apparel.

GST Rate: New Tax Rate On Garments 

As per the proposal reportedly put forth by the Group of Ministers, readymade garments costing up to Rs 1,500 would attract 5 per cent GST, and those between Rs 1,500 and Rs 10,000 would attract 18 per cent. Garments costing above Rs 10,000 would attract a 28 per cent tax. 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, PTI reported. The GoM report is expected to be discussed by the GST Council -- chaired by the Union Finance Minister and comprising her state counterparts -- on December 21. A final decision on GST rate changes will be taken by the council - the report further said.

GST Tax Rate: What About ‘Sin’ Products?

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, PTI reported. 

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, and washing machines, and demerit goods like aerated water and tobacco products attract cess on top of the highest 28 per cent slab. The official said the GoM on rate rationalisation has finalised its report on Monday to be presented before the council. 

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. 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. It had also decided to propose to the council to reduce GST on bicycles costing less than Rs 10,000 to 5 per cent, from 12 per cent. 

Also, GST on exercise notebooks would be reduced to 5 per cent from 12 per cent.  The GoM also proposed hiking GST on shoes above Rs 15,000/pair from 18 per cent to 28 per cent. It also proposed hiking GST on wristwatches above Rs 25,000 from 18 per cent to 28 per cent in the previous meeting on October 19. 

(With PTI inputs)