GST Rate Hike: In the new year, consumption of cigarettes, tobacco and cold drinks can be heavy on the pocket. The Group of Ministers formed to rationalize GST rates has recommended increasing the GST rates on these products from the current level of 28 percent to 35 percent. The 55th meeting of the GST Council is going to be held in Jaisalmer, Rajasthan on 21 December 2024, in which a final decision can be taken regarding increasing the GST rate on cigarettes, tobacco and cold drinks.
GST rate will increase on cigarettes and tobacco
The GST Council had formed a Group of Ministers under the chairmanship of Bihar Deputy Chief Minister Samrat Chaudhary to rationalize the rates. After mutual consent, the Group of Ministers has proposed to increase the GST rate on cigarettes, tobacco and related products along with aerated beverages (cold drinks) to 35 percent, which is currently 28 percent.
28% GST will be imposed on expensive clothes!
The Group of Ministers has recommended rationalizing GST rates on clothing. GoM has maintained 5 percent GST rate on clothes up to Rs 1500. But it has been proposed to impose 18 percent GST on clothes priced between Rs 1500 to Rs 10,000 and 28 percent GST on clothes costing more than Rs 10,000. This means that clothes costing more than Rs 10,000 will also come under the category of luxury items. The committee headed by Samrat Chaudhary has suggested changes in GST rates on 148 items. An official said that the impact of change in GST rate on revenue will be positive.
GST Council will take the final decision
At present there are four slabs of GST rates. At present, there are four-tier GST rates slabs of 5, 12, 18 and 28 percent which will continue in future also. And the Group of Ministers has proposed a new GST rate of 35 percent. The recommendations of the Group of Ministers will be discussed in the GST Council meeting to be chaired by Finance Minister Nirmala Sitharaman on December 21 and after that the Council will take the final decision on it.
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