On the GST rate rationalization, the GoM suggested lowering the tax rates on 20-litre packaged drinking water bottles, bicycles, and practice notebooks to 5%, however, it recommended raising the taxes on high-end wristwatches and shoes, as per the official.
According to officials, GoM’s decision on the rate rejig on the GST rate rationalization under Bihar Deputy Chief Minister Samrat Chaudhary would lead to a revenue gain of Rs 22,000 crore.
The GoM seeks to lessen the GST on the packaged drinking water of 20 litres, exceeding 5% from 18%. If the suggestion of the GoM is accepted via the GST council then the GST on the bicycles of less than Rs 10,000 shall be decreased to 5% from 12%. GST towards the exercise notebooks shall be lessened from 12 to 5 per cent, as per the proposal of the GoM.
It is indeed recommended by the Group of Ministers (GoM) to increase the GST on shoes costing more than Rs 15,000 a pair and on wristwatches exceeding Rs 25,000 from 28 to 18 per cent. On the rate rationalization GoM in its earlier meeting concerned about the tax rate changes on over 100 items along with the lowering taxes on specific goods to 5% from 12%, to furnish relief to the common man.
Items such as hair dryers, hair curlers, and beauty or make-up preparations which are in the 18% GST slab rate that the GoM took up can be back in the 28% bracket.
The six-member GoM comprises 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.
GST is a four-tier tax structure with slabs at 5, 12, 18, and 28 per cent, at present. Crucial items under Goods and Services Tax (GST) may get waived or levied to tax at the lowest slab, and the luxury and demerit items draw the highest slab. Luxury and sin goods draw cess on top of the highest 28% slab.
The average GST rate has reduced below the revenue neutral rate of 15.3 per cent seeking for the discussions on the GST rate rationalisation.
