The Group of Ministers (GoM) on GST rate rationalization has proposed reducing tax rates on 20-litre packaged drinking water bottles, bicycles, and exercise notebooks to 5% from their current rates of 18% and 12%, but suggested raising taxes on high-end wristwatches and shoes.
GoM in India recommended lowering GST rates on water bottles, bicycles and exercise notebooks
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Author: Ivana Picajkić
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Fiscal subject related
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Content accuracy validation date:
15.11.2024
Content accuracy validation time:
07:21h
The GoM on rate rationalisation in its last meeting had discussed tax rate tweaks on over 100 items, including lowering taxes on certain goods from 12 to 5% to give relief to the common man. The GoM proposed reducing GST on packaged drinking water of 20 litres and above from 18% to 5%, and bicycles costing less than Rs 10,000 from 12% to 5%.
The GoM also suggested raising GST on shoes above Rs 15,000 a pair and on wrist watches above RS 25,000 from 18% to 28%. Some items with a GST of 18% like hair dryers, hair curlers, beauty products could go back in the 28% bracket.
This decision would lead to a revenue gain of ₹22,000 crore.
Currently, GST is a four-tier tax structure with slabs at 5, 12, 18 and 28%. Essential items are either exempted or taxed at the lowest slab, while luxury items attract the highest slab.
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