The Group of Ministers (GoM) on GST rate rationalization has recommended raising the tax on products like aerated beverages, cigarettes, and other tobacco-related items from 28% to 35%, according to PTI. This proposal is part of an effort to enhance revenue collection by adjusting tax rates on specific goods. The GoM, chaired by Bihar Deputy Chief Minister Samrat Choudhary, also reviewed GST structure changes for items such as apparel during its meeting on Monday.
Under the proposed structure, readymade garments priced up to ?1,500 will attract a 5% GST, garments costing between ?1,500 and ?10,000 will be taxed at 18%, and those above ?10,000 will face a 28% rate. Overall, the GoM has suggested tax revisions for 148 items, aiming to boost revenue. The group’s report will be presented to the GST Council, led by the Union Finance Minister and state finance ministers, on December 21, 2024, for a final decision.
The proposal includes introducing a 35% GST rate as a special tier within the existing four-tier system of 5%, 12%, 18%, and 28%. Luxury and demerit goods, such as aerated drinks, tobacco products, and luxury vehicles, currently taxed at 28% with an additional cess, would fall under this new category. The council will review the GoM’s recommendations to determine the feasibility of expanding rate rationalization and may also consider extending the GoM’s mandate to regularly examine GST rates.
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