NEW DELHI: The Group of Ministers (GoM) on GST rate rationalisation on Monday decided to hike tax on sin goods like aerated beverages, cigarettes, tobacco and related products to 35% from the present 28%, an official said.
The GoM on rate rationalisation under Bihar Deputy Chief Minister Samrat Chaudhary also decided to rationalise tax rates on apparel.
As per the decision, readymade garments costing up to Rs 1,500 would attract 5% GST, those between Rs 1,500 and Rs 10,000 would attract 18%. Garments costing above Rs 10,000 would attract 28% tax.
In total, the GoM on rate rationalisation will propose tax rate tweaks on 148 items to the GST Council.
“The net revenue impact will be positive,” an official said.
The GoM report is expected to be discussed by the GST Council -- chaired by Union Finance Minister and comprising her state counterparts -- on December 21.
A final decision on GST rate changes will be taken by the council.
Finance Ministry sources told TNIE that these are just recommendations by the GoM on rate rationalisation, the final decision will be taken only in the GST Council.
Currently, GST is a four-tier tax structure with slabs at 5, 12, 18, and 28%.
Under GST, essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury goods like car, washing machine, and demerit goods like aerated water and tobacco products attract cess on top of the highest 28% slab.
The official said the GoM on rate rationalisation has finalised its report on Monday to be presented before the council.