The Group of Ministers (GoM) on GST rate rationalization on Saturday discussed potential changes in tax rates for various goods which can generate additional revenue of Rs 22,000 crore, according to news agency PTI citing an official.
The GoM, chaired by Bihar deputy CM Samrat Chaudharyrecommended reducing the GST on packaged drinking water bottles of 20 liters and above from 18 per cent to 5 per cent.They also suggested lowering the GST on bicycles costing less than Rs 10,000 from 12 per cent to 5 per cent.
Additionally, the GST on exercise notebooks was proposed to be reduced from 12 per cent to 5 per cent.
However, they also suggested increasing the GST on high-end shoes (above Rs 15,000 a pair) and wrist watches (above Rs 25,000) from 18 per cent to 28 per cent. The final decision will be taken by the GST Council,
Earlier, the GoM discussed potential tax rate changes for over 100 items, aiming to provide relief to the common man by lowering taxes on certain goods from 12 per cent to 5 per cent while Some items currently in the 18 per cent slab, such as hair dryers, hair curlers, and beauty or make-up preparations, may be moved back to the 28 percent bracket.
The six-member GoM includes finance ministers and health services ministers from various states, such as Uttar Pradesh, Rajasthan, Karnataka, and Kerala.
The current GST structure consists of four tax slabs: 5, 12, 18, and 28 per cent. Essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab, with an additional cess on top of the 28 per cent slab for luxury and sin goods.
The need for GST rate rationalization has arisen due to the average GST rate falling below the revenue neutral rate of 15.3 per cent.
