Proposal of new tax slabs for cigarettes, tobacco, harmful beverage products; Know expected announced date

A meeting of the Group of Ministers (GOM), which decides the tax on different things in the Goods and Services Tax (GST) system, was held on Monday. It was decided that tax on the items that harm the society would be increased. In view of this, a 35 percent tax has been imposed on cigarettes, tobacco, cold drinks, and other carbonated drinks and related products. The tax rate on such products is presently fixed at 28 percent.

The Group of Ministers, led by Bihar Deputy Chief Minister Samrat Chaudhary, has decided on the rationalization of tax levied on clothes. Under this, a 5 percent tax will be levied on readymade garment clothes up to Rs. 1500, 18 percent on each cloth from 1500 Rs to 10 thousand, and 28 percent on clothes for more than 10, 000.

It has been told that the Group of Ministers will submit a proposal to the GST Council for tax changes on 148 items. It is expected to have a positive impact on the total revenue. An official said that the system of four-level tax slabs of 5, 12, 18, and 28 percent will continue. However, the Group of Ministers has proposed a new rate of 35 percent this time.

The report of the Group of Ministers is expected to be discussed in the meeting of the GST Council meeting scheduled on December 21. The Council will be attended by the Union Finance Minister Nirmala Sitharaman along with the Finance Ministers of the states. The final call on the change in the rate of GST will be taken by the GST Council.

Meanwhile, the GoM constituted on GST compensation cess decided to seek about six months more time from the GST Council to submit its report. The group was supposed to submit its report to the GST Council by December 31. This GoM is under the leadership of Minister of State for Finance Pankaj Chaudhary and comprises members from Assam, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Punjab, Tamil Nadu, Uttar Pradesh, and West Bengal.