The recommendations will be made to GST Council on 21st Dec, 2024…
Digital Desk: The GST Council, on 2nd December, proposed to increase the goods and services tax levied on tobacco products and aerated drinks to 35 percent by the GoM. The GoM on GST rate reform has suggested the government raise the GST on carbonated beverages as well as cigarettes and other tobacco products from 28 percent to 35 percent. This proposal, one of several to raise revenues, effectively increases the range of GST rates from the current 5%, 12%, 18%, and 28%. Basic goods will retain zero rating or the lowest slabs, and luxury and demerit goods will have higher slabs along with a process.
The GoM also announced new rates proposed for 148 items in accordance with revenue targets and effect on the consumer. Current tax slabs for general goods are structured as follows:
Costing up to ₹1,500: Taxed at 5%. Between ₹1,500 and ₹10,000: Taxed at 18%. Above ₹10,000: Taxed at 28%.
Key changes proposed by the GoM include:
Packaged Drinking Water (20L+): Reduce GST from 18% to 5%. Bicycles (<₹10,000): Reduce GST from 12% to 5%. Exercise Notebooks: Reduce GST from 12% to 5%. Shoes (>₹15,000): Increase GST from 18% to 28%. Wristwatches (>₹25,000): Increase GST from 18% to 28%.
The recommendations will be made to GST Council on 21st Dec, 2024. The council comprises the Union Finance Minister and the finance ministers of states and will be responsible for making these changes. The GoM may also be required to perform the review of the GST rates from time to time in order to exercise constant and systematic rationalization and optimization.
