GST Revamp: Higher Taxes on Sin Goods and Apparel Adjustments

On Monday, the Group of Ministers on GST rate rationalisation proposed a new 35% tax on tobacco and aerated beverages. Changes in apparel tax rates were also decided. A comprehensive review affecting 148 items will be discussed by the GST Council, impacting government revenue positively.

A 35% tax on tobacco and aerated beverages has been proposed by the Group of Ministers (GoM) on GST rate rationalisation, marking a significant increase from the existing 28% rate, according to an unnamed official source.

Chaired by Bihar Deputy Chief Minister Samrat Chaudhary, the GoM also reviewed tax rates on apparel. It was decided that garments priced up to Rs 1,500 will attract a 5% GST, those between Rs 1,500 and Rs 10,000 will have an 18% tax, and items priced above Rs 10,000 will be taxed at 28%.

The GoM, which plans to propose adjustments on 148 items to the GST Council, anticipates a positive revenue impact. These proposals will be scrutinized by the GST Council during its meeting on December 21, which is chaired by the Union Finance Minister.

(With inputs from agencies.)