The Group of Ministers (GoM), constituted to rationalize GST rates, on Monday decided to increase the tax rate on carbonated beverages, cigarettes, tobacco and related harmful products to 35 percent from the current 28 percent. However, the final decision in this regard has to be taken by the GST Council.
Rates will also change on readymade garments
An official said that the GoM headed by the Deputy Chief Minister of Bihar has decided to rationalize the tax rates on apparel also. According to the decision of the GOM, now 5 percent GST will be levied on ready-made garments up to Rs 1,500, 18 percent GST on ready-made garments priced between Rs 1,500 to Rs 10,000 and 28 percent GST on garments priced above Rs 10,000.
There may be change in tax rates on 148 items
The official said that the Group of Ministers will propose changes in tax rates on a total of 148 items. Its net revenue impact will be positive. The report of the Group of Ministers will be discussed in the GST Council meeting to be held on December 21. The final decision regarding changes in taxes has to be taken by the GST Council.
New slab will be made for products like tobacco
The official said that an additional slab will be created for 35 percent tax on tobacco and related products. The tax slabs of 5, 12, 18 and 28 percent will continue as before. The Group of Ministers finalized its report on Monday to present it in the GST Council. The GoM had proposed changes in tax rates on several items in October. The main thing in this is to reduce the tax rate on drinking water bottles of 20 liters or more capacity from 18 percent to five percent.
The Group of Ministers on GST Compensation Cess will ask for more time. The official said that the Group of Ministers formed on GST Compensation Cess decided on Monday to ask for six months more time to submit its report. This Group of Ministers, headed by Minister of State for Finance Pankaj Chaudhary, also includes members from Assam, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Punjab, Tamil Nadu, Uttar Pradesh and Bengal.