GST Rate Shake-up: Revised Tax Proposals Set to Stir Council Meeting

The Group of Ministers (GoM) has postponed submitting its report on GST rate rationalisation for 148 items to the GST Council. Highlights include proposed tax increases on 'sin goods,' clothing, and accessories. Additionally, tax cuts on essential goods like packaged water and bicycles were suggested.

The Group of Ministers (GoM) has delayed presenting its report on GST rate rationalisation to the GST Council, according to Bihar Deputy Chief Minister Samrat Chaudhary. The report, targeting 148 items, was initially expected at the recent Council meeting. It suggests significant tax adjustments, especially for 'sin goods' like tobacco and aerated beverages, raising rates from 28% to 35%.

The current four-tier GST system, with rates of 5%, 12%, 18%, and 28%, sees luxury items taxed at the highest rate, while essentials are at 5%. Proposed changes include varying GST on apparel based on price, with items under Rs 1,500 at 5%, those costing Rs 1,500-10,000 at 18%, and items over Rs 10,000 at 28%.

The GoM also suggests increasing the GST on high-end shoes and watches from 18% to 28%, while recommending cuts on packaged drinking water, bicycles under Rs 10,000, and exercise notebooks to 5%. These changes aim to balance taxation on luxury versus essential goods.

(With inputs from agencies.)