GoM on rate rationalisation defers report submission to GST Council

The GoM on GST rate rationalisation on Saturday deferred submission of its report, which suggested rate rationalisation in 148 items, to the GST Council, the panel's convenor and Bihar Deputy Chief Minister Samrat Chaudhary said.

"Will submit the Group of Ministers (GoM) report on rate rationalisation in next meeting of the Council," Chaudhary told reporters here.

The GoM had earlier this month arrived at a broad consensus to rejig tax rates on about 148 items, including levying a higher 35% tax on sin goods, like aerated beverages and tobacco products, as compared to 28% at present.

It was widely expected that the GoM would submit its report to the GST Council meeting on Saturday.

Currently, GST is a four-tier tax structure with slabs at 5, 12, 18 and 28%. Luxury and demerit goods are taxed at highest bracket of 28 per cent, while packed food and essential items are at the lowest 5 per cent slab.

The GoM had also decided to propose rationalising tax rates on apparel. As per the decision, ready-made garments costing up to ₹1,500 would attract 5% GST, those between ₹1,500 to ₹10,000 would attract 18%. Garments costing above ₹10,000 would attract 28% tax.

Currently, garments costing up to ₹1,000 attract 5% GST, while those above that attract 12%. The GoM also proposed hiking GST on shoes above ₹15,000/pair from 18% to 28%. It also proposed raising GST on wrist watches above ₹25,000 from 18% to 28%.

The GoM had proposed reducing GST on packaged drinking water of 20 litre and above to 5% from 18%, and reducing tax rate on bicycles costing less than ₹10,000 to 5%, from 12%. Also, GST on exercise notebooks would be reduced to 5% from 12%.