New Delhi:
The government can make some changes in GST i.e. Goods and Services Tax. A big change may be seen in GST rates soon. Taxes on many things may increase. The Group of Ministers formed to rationalize the GST rate on Monday recommended increasing the tax rate on harmful products like cold drinks, cigarettes and tobacco from the current 28 percent to 35 percent.
If these changes are implemented, the prices of cold drinks, cigarettes and tobacco as well as some clothes may also increase. These changes will be finalized in the GST Council meeting to be held on December 21.
Overall, proposal to change tax rates on 148 items
The GST Council will take the final decision on the decisions taken in the meeting of the Group of Ministers. The Group of Ministers will propose changes in the tax rates on a total of 148 items to the GST Council. An official said, ‘The net revenue impact of this move will be positive.’ The official said, “The Group of Ministers has agreed to impose a special rate of 35 percent on tobacco and its products other than aerated beverages (cold drinks).” .”
GOM recommends new rate of 35 percent
The official said the four-tier tax slab of five, 12, 18 and 28 per cent will continue and a new rate of 35 per cent has been proposed by the GoM. Along with this, the GoM has also approved five per cent GST on ready-made garments costing up to Rs 1,500. It has been said that 18 per cent tax will be levied on clothes priced between Rs 1,500 to Rs 10,000 and 18 per cent on clothes costing more than Rs 10,000. 28 percent tax will be imposed.
The decision will be taken in the GST Council meeting on 21st December.
The report of the Group of Ministers is expected to be discussed in the GST Council meeting on December 21. The council will be chaired by Union Finance Minister Nirmala Sitharaman and finance ministers of states will also participate in it. Only the GST Council will take the final decision on change in GST rate.
Currently, GST is a four-tier tax structure with slabs of five, 12, 18 and 28 percent.
Meanwhile, the GOM constituted on GST Compensation Cess has decided to seek more time of about six months from the GST Council to submit its report. The group had to submit its report to the GST Council by December 31.
Minister of State for Finance Pankaj Chaudhary is leading the GOM.
This GOM was formed under the leadership of Minister of State for Finance Pankaj Chaudhary. It includes members from Assam, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Punjab, Tamil Nadu, Uttar Pradesh and West Bengal.
“The GoM decided that there are several legal issues involved in the compensation cess case,” the official said. Various aspects of the law have to be discussed in detail, which will take time. It has been decided to seek extension of time for submitting the report to the Council. In such a situation, this group of ministers can ask for more time of five to six months.
