Mon Dec 02 18:02:33 UTC 2024: ## GST Council to Consider Significant Tax Rate Changes: Sin Goods & Apparel Targeted

**New Delhi, [Date]** – The Goods and Services Tax (GST) Council is set to consider major revisions to tax rates on a range of goods, following recommendations from a Group of Ministers (GoM). The GoM, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, finalized its report on Monday, proposing changes to the tax structure for 148 items. The changes aim for revenue neutrality.

Key proposed changes include:

* **Increased tax on sin goods:** A 35% GST rate is proposed for aerated drinks, cigarettes, tobacco, and related products, up from the current 28%. This represents a new highest rate under the existing four-tier system (5%, 12%, 18%, 28%).

* **Revised apparel taxation:** Readymade garments will be taxed differently based on price: 5% for garments up to Rs 1,500, 18% for those between Rs 1,500 and Rs 10,000, and 28% for garments costing more than Rs 10,000.

The GoM’s report will be discussed by the GST Council, headed by the Union Finance Minister, on December 21. The Council will make the final decision on whether to implement these changes. The Council may also decide to retain the GoM to continue periodic rate rationalization reviews.

Previous GoM recommendations, to be considered alongside the new proposals, include:

* Reducing GST on packaged drinking water (20 liters and above) to 5% from 18%.
* Reducing GST on bicycles (under Rs 10,000) to 5% from 12%.
* Reducing GST on exercise notebooks to 5% from 12%.
* Increasing GST on shoes (above Rs 15,000) to 28% from 18%.
* Increasing GST on wristwatches (above Rs 25,000) to 28% from 18%.

The overall impact of the proposed changes is expected to be revenue positive for the government.

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