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GST rates to be cut on 20 litre water bottles and bicycles to 5%, raised for luxury shoes, watches, and beauty products
The estimated revenue gain from all the new changes made by the GoM on GST rationalisation would be ₹22,000 crore
The Group of Ministers (GoM) for GST rate rationalisation has decided to lower the tax rates on 20-litre packaged drinking water bottles, bicycles and exercise notebooks to 5% from 18% earlier, according to a PTI report which cited unnamed officials. HT couldn't independently verify the information.
However, the GoM also suggested to raise taxes on high-end wrist watches costing over ₹25,000 and shoes costing over ₹15,000, to 28% from 18% earlier according to the report, which added that all of the changes together by the GoM headed by Bihar Deputy Chief Minister Samrat Chaudhary would result in a revenue gain of ₹22,000 crore.
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The GoM is a committee formed by the Goods and Services Tax (GST) Council to address specific issues.
The six-member GoM on GST rationalisation also included Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh, Karnataka Revenue Minister Krishna Byre Gowda, and Kerala Finance Minister K N Balagopal.
The GoM on GST rationalisation was formed this time after the average GST rate fell below the revenue neutral rate of 15.3%, according to the report.
In its previous meeting on Saturday, the GoM had discussed tax rate tweaks on more than a 100 items.
What are the other proposed changes in the GST rate?
The GST on bicycles costing less than ₹10,000 could also get reduced to 5% from 12% earlier, according to the report.
Certain items in the 18% slab like hair dryers, hair curlers, and beauty or make-up preparations could get taken into the 28% bracket, the report read.
What are the current GST slabs?
GST is currently a four-tier tax structure with 5%, 12%, 18%, and 28% slabs, with essential items being exempted or taxed the lowest and luxury items being taxed the highest.
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