Urgent GST Council Meeting: Impact of 35% Special Rate on Tobacco, Aerated Drinks, and ‘Sin’ Goods Unveiled
GUWAHATI: In anticipation of the December 21 GST Council meeting in Jaisalmer, the Group of Ministers (GoM) has proposed revisions to the Goods and Services Tax (GST) structure, aiming to boost revenue from high-risk “sin” goods. Key among the recommendations is the introduction of an additional 35% GST surcharge on tobacco products, aerated beverages, and similar items, beyond the current rates. Tobacco products currently incur a 28% GST plus a compensation tax between 11% and 290%, while aerated beverages face a 28% GST with a 12% compensation tax.
Led by Bihar Deputy Chief Minister Samrat Choudhary, the GoM is set to discuss these proposals in depth at the council meeting. Additionally, the GoM suggests restructuring GST slabs for over 148 items, affecting categories like ready-made garments and luxury goods. Proposed rates for garments include a 5% GST for items up to Rs 1,500, an 18% rate for those between Rs 1,500 and Rs 10,000, and 28% for items surpassing Rs 10,000. This strategy seeks to align tax rates with product value, potentially reducing GST on essentials like bottled water and exercise notebooks.
Significant changes could also occur in the taxation of health and life insurance premiums, presently taxed at 18%. The GoM considers exempting premiums for senior citizen health insurance and term life insurance up to Rs 5 lakh, maintaining the 18% rate for higher premiums.
Furthermore, the GoM is reviewing the extension and potential impact of the compensation tax, initially due to expire in June 2022, but extended to March 2026 to cover state revenue losses from GST’s rollout. The upcoming council meeting will be pivotal for these proposals’ fate, with the potential to significantly alter the GST regime, influencing both consumers and the business landscape.
Original Source: https://www.guwahatiplus.com/india/gst-council-to-discuss-35-special-rate-on-tobacco-aerated-drinks-other-sin-goods
Category : India
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Publish Date: 2024-12-03 10:11:00
