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GoM proposes a series of GST rate rationalisation

GoM proposes GST cuts on water bottles and bicycles, higher rates for expensive shoes and watches

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NEW DELHI: The Group of Ministers (GoM) on Goods and Services Tax (GST) rate rationalisation, led by Bihar Deputy Chief Minister Samrat Chaudhary, has recommended lowering tax rates on 20-litre packaged drinking water bottles, bicycles, and exercise notebooks to 5 per cent. \

At the same time, the GoM proposed increasing GST on high-end shoes and wristwatches, an official said on Saturday.

The GoM’s proposed rate changes aim to bring about a net revenue gain of Rs22,000 crore. One key proposal includes cutting the GST on packaged drinking water bottles (20 litres or more) from 18 per cent to 5 per cent.

Additionally, the group suggested reducing GST on bicycles priced below Rs10,000 to 5 per cent from the current 12 per cent. Similarly, GST on exercise notebooks would drop to 5 per cent from 12 per cent, offering relief to consumers.

Luxury items may be dearer

However, the GoM recommended hiking GST on luxury items, with shoes priced above Rs15,000 a pair and wristwatches costing over Rs25,000 to be taxed at 28 per cent up from the current 18 per cent.

In its previous meeting, the GoM had deliberated on tax adjustments for over 100 items, with a focus on reducing rates for goods in the 12 per cent bracket to 5 per cent, providing relief to the common man.

Some items currently taxed at 18 per cent, such as hair dryers, hair curlers, and certain beauty products, could see a shift to the 28 per cent slab under the GoM’s suggestions.

Six-member GoM

The GoM on rate rationalisation consists of six members, including Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh, Karnataka Revenue Minister Krishna Byre Gowda, and Kerala Finance Minister K. N. Balagopal.

The final decision on the GoM’s recommendations will be taken by the GST Council in an upcoming meeting.

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