Cigarettes, Tobacco Products Set to Become More Expensive Soon

New Delhi: The Group of Ministers (GoM) on GST rate rationalisation, led by Bihar Deputy Chief Minister Samrat Chaudhary, decided to increase the tax on sin goods such as aerated beverages, cigarettes, tobacco, and related products from the current 28% to 35%.

The GoM also proposed new tax slabs for apparel: readymade garments priced up to Rs 1,500 will attract a 5% GST, those priced between Rs 1,500 and Rs 10,000 will have an 18% rate, and garments costing over Rs 10,000 will be taxed at 28%.

The GoM’s report, covering 148 items, will be presented to the GST Council, which will discuss it on December 21.

The council, chaired by the Union Finance Minister and comprising state finance ministers, will make the final decision on the proposed rate changes. An official mentioned that the net revenue impact would be positive.

The GoM has recommended a special 35% rate for tobacco products and aerated beverages, while the existing four-tier GST structure (5%, 12%, 18%, and 28%) will remain in place. Currently, essential items are either exempt or taxed at the lowest slab, while luxury and demerit goods are subject to the highest rate and an additional cess.

In its October meeting, the GoM proposed reducing the GST on packaged drinking water (20 litres and above) to 5% from 18%, cutting GST on bicycles priced below Rs 10,000 to 5% from 12%, and lowering GST on exercise notebooks to 5% from 12%.

It also proposed raising the GST on shoes priced above Rs 15,000 per pair from 18% to 28% and on wristwatches costing more than Rs 25,000 from 18% to 28%. The council may decide to retain the GoM for continued periodic rationalisation.

(With PTI Inputs)

Cigarettes, Tobacco Products Set to Become More Expensive Soon

The GoM on GST rationalisation decided to increase tax on sin goods like aerated beverages, cigarettes, and tobacco from 28% to 35%.