Cold drinks, cigarettes, and tobacco may become more expensive shortly, while bottled water, bicycles, and other items may become cheaper. The Group of Ministers (GoM), formed to rationalize GST rates, recommended on Monday (2 December) an increase in tax rates on harmful products like cold drinks, cigarettes, and tobacco from the current 28% to 35%.
The GoM’s report is expected to be discussed at the GST Council meeting on 21 December. An official stated that the GoM, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, also decided to rationalize the tax rates on clothes. The final decision on the recommendations made by the GoM will be taken by the GST Council. The GoM has proposed changes in the tax rates for a total of 148 items.
GoM Recommends GST Rate Changes on 148 Items
According to sources from CNBC Awaaz, the Group of Ministers (GoM) on Rate Rationalisation has recommended changes in the GST rates for 148 items. Commonly used items like bottled water, bicycles, and exercise notebooks may become cheaper.
Proposed Reductions in GST Rates
- Bottled Water and Bicycles: GST could be reduced on bottled water and bicycles, including those costing under ₹10,000.
- Exercise Notebooks: The GST rate on children’s exercise notebooks may be reduced from 12% to 5%.
Proposed Increases in GST Rates
- Luxury Items: GST on expensive watches and shoes is proposed to increase to 28%.
- Packaged Water: A 5% GST may be imposed on packaged water above 20 litres.
GST on Readymade Clothes
- Clothes Under ₹1,500: A 5% GST may be applied to readymade clothes costing up to ₹1,500.
- Clothes Between ₹1,500 and ₹10,000: GST is expected to be set at 18%.
- Clothes Over ₹10,000: A 28% GST could be imposed on high-end clothing.
GST Slab Structure and Proposed New Rate
The current four-tier GST slab of 5%, 12%, 18%, and 28% will continue, with a proposed new rate of 35%.
GST Council Meeting Details
The Group of Ministers will submit its report to the GST Council this week. The 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, will be held in Jaisalmer on December 21 to discuss the proposed rate rationalisations.