The Live Ahmedabad
  • Home
  • Ahd City
  • Business
  • Entertainment
  • Education
  • Crime
  • Health
  • Politics
  • Sports
  • Featured

The Live Ahmedabad

  • Home
  • Ahd City
  • Business
  • Entertainment
  • Education
  • Crime
  • Health
  • Politics
  • Sports
  • Featured
Nation

GoM proposes hike in GST on aerated drinks, cigarettes & tobacco to 35%

by TLAteam December 3, 2024December 3, 2024
written by TLAteam December 3, 2024December 3, 2024
GoM proposes hike in GST on aerated drinks, cigarettes & tobacco to 35%

IN A step that would mark the first major restructuring of tax rates under the Goods and Services Tax (GST) seven years after its rollout, a special rate of 35 per cent could be carved out for demerit (sin) goods such as aerated beverages, cigarettes, tobacco and related products.

Business News

At a meeting on Monday, ahead of the GST Council meeting on December 21, the Group of Ministers (GoM) on rate rationalisation finalised its report with this recommendation of a special rate, in addition to proposing a slew of rate tweaks for over 148 items including readymade garments.

The proposed hike in GST rates for sin goods, from the current highest slab of 28 per cent, would help the Centre and the states to make up for the loss from other rate cuts for common-use items, officials said. The current four-slab GST structure — of 5 per cent, 12 per cent, 18 per cent and 28 per cent — will continue for the medium term, a state finance minister said.

Among other rate change proposals, the GoM, headed by Bihar Deputy Chief Minister Samrat Choudhary, has suggested levying 5 per cent GST on readymade garments priced up to Rs 1,500; 18 per cent for those priced at Rs 1,500-10,000; and 28 per cent for garments costing above Rs 10,000.

“The GoM has proposed raising the rates for tobacco and related products, and aerated beverages to 35 per cent. It will be a special rate and will help in minimising the revenue loss impact from the other rate changes,” a state finance minister, who is part of the GoM, told The Indian Express.

The GoM has also proposed hiking rates on other high-end items such as cosmetics, watches and shoes. With this, the indirect tax regime would transition towards a regime where taxation gets linked to the pricing of the product and hence, a greater incidence would be on those who buy luxury and high-end items.

The GST Council is scheduled to meet in Jaisalmer on December 21, where it will also take up the key proposal of GST on life and health insurance premiums. The premiums paid by senior citizens for health insurance and premiums paid by all for term life insurance are likely to be exempted. For other citizens, health insurance cover till Rs 5 lakh is likely to be exempted and the existing rate of 18 per cent will be charged for health insurance cover over Rs 5 lakh.

At its meeting in October, the GoM had suggested GST rejig for several items and proposed cutting rates for some items such as packaged water above 20 litres (5 per cent from 18 per cent), bicycles priced less than Rs 10,000 (5 per cent from 12 per cent) and exercise notebooks (5 per cent from 12 per cent). Shoes costing above Rs 15,000 and wristwatches above Rs 25,000 are likely to be shifted to the highest slab of 28 per cent GST from 18 per cent.

Separately, the GoM on compensation cess, headed by Minister of State for Finance Pankaj Chaudhary, also held its meeting on Monday and sought an extension of six months to submit its report to the GST Council. This GoM, which includes members from Assam, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Punjab, Tamil Nadu, Uttar Pradesh and West Bengal, was mandated to submit its report by December 31.

The GoM is looking at the legal implications of removal of the cess — levied on sin and luxury goods such as cars, tobacco, over and above the existing highest rate of 28 per cent. “There is time till March 2026 to take a decision regarding the levy of the cess. So it was felt that a detailed discussion should happen, and so more time will be sought for submission of the report,” the minister said.

The compensation cess was proposed to be levied for five years after the rollout of GST, till June 2022, to compensate states for revenue loss. In 2022, the Council decided to extend the levy till March 2026 to repay the interest and principal amount of the Rs 2.69 lakh crore of loans taken in 2021-2022 to pay off states’ revenue loss during Covid years. At its meeting on September 9, the Council decided to set up a GoM to decide the future course of the cess.

0 comment
previous post
Gujarat Govt appoints 9-member team to oversee CCTV installation
next post
Think ‘brain rot’ summed up 2024? Oxford agrees it was the word of the year

You may also like

IRCTC Flags 2.9 Lakh Suspicious Bookings in Major...

June 5, 2025

DIGIPIN Explained: India’s New Digital Addressing System

June 5, 2025

Big changes by Indian Railways to fix Tatkal...

June 5, 2025

RCB Victory Celebration Turns Deadly: 3 Dead Many...

June 4, 2025

Monsoon Session of Parliament from July 21; First...

June 4, 2025

Medical Representatives Barred from Government Hospitals, Says Health...

June 4, 2025

“18 Years. 2 Virgins”: Durex India’s Bold IPL...

June 3, 2025

Nashik Kumbh Mela 2025 Starts on October 31-...

June 3, 2025

Rajeev Shukla Likely to Become BCCI President as...

June 2, 2025

Sensex Falls 700 Points Despite Strong GDP Growth:...

June 2, 2025

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

Business News

Recent Posts

  • IRCTC Flags 2.9 Lakh Suspicious Bookings in Major Crackdown on Ticketing Fraud

    June 5, 2025
  • DIGIPIN Explained: India’s New Digital Addressing System

    June 5, 2025
  • Fire break out at chemical company in Vadodara, 4 fire brigade teams sent

    June 5, 2025
  • Shakti Mohan Sizzles in Bikini Looks

    June 5, 2025
  • Surat businessman gets notice after Operation Sindoor-themed installation causes traffic snarls

    June 5, 2025
December 2024
MTWTFSS
 1
2345678
9101112131415
16171819202122
23242526272829
3031 
« Nov Jan »
The Live Ahmedabad
Footer Logo
  • Home
  • Ahd City
  • Business
  • Entertainment
  • Education
  • Crime
  • Health
  • Politics
  • Sports
  • Featured
  • Privacy Policy
  • Disclaimer
  • Cookie Policy
  • Terms of use
  • Advertise with Us
  • Work With Us
  • Contact Us

© 2021 - The Live Ahmedabad. All Rights Reserved.