GST rate revision has been proposed for 148 goods and services, with significant changes expected across tobacco products, aerated beverages, luxury goods and essential items. The Group of Ministers (GoM) on Rate Rationalisation has reportedly recommended introducing a new 35% GST rate for selected products, including tobacco and aerated water, which currently attract a 28% GST rate.
GST Rate Revision: Proposed Changes
The GoM has suggested GST Rate Revision for 148 items. Key changes include:
| Category | Current GST Rate | Proposed GST Rate |
|---|---|---|
| Tobacco products | 28% | 35% |
| Aerated water | 28% | 35% |
| Watches (above ₹25,000) | 18% | 28% |
| Shoes (above ₹15,000) | 18% | 28% |
| Packaged water | 18% | 5% |
| Notebooks | 12% | 5% |
Impact on Apparel
Changes to GST rates for readymade garments have also been proposed:
- 5% GST on garments priced up to ₹1,500.
- 18% GST on garments priced between ₹1,500 and ₹10,000.
- 28% GST on garments priced above ₹10,000.
Focus on Luxury and Everyday Items
The recommendations include higher taxes on luxury items such as leather bags, cosmetics, and high-end watches. Conversely, essential items like notebooks and packaged water may see reduced rates to provide relief to consumers.
The proposed revisions aim to rationalize the tax structure and balance the fiscal burden across various segments. Final decisions are expected after review and approval by the GST Council.
