In a move to reshape the way we pay taxes on everyday items, the Group of Ministers (GoM) has proposed changes to the Goods and Services Tax (GST) rates in India. If approved, this plan could lower taxes on essential goods like bottled water, bicycles, and exercise notebooks, making them more affordable for everyone.
At the same time, the GoM also has proposed to increase taxes on luxury items such as high-end watches and expensive shoes.
The Group of Ministers (GoM) on GST rate rationalisation has put forth some recommendations with an aim to reshape the taxation landscape.
Under the leadership of Bihar Deputy Chief Minister Samrat Chaudhary, the move aims to bring a relief to everyday consumers while also generating substantial revenue for the government, according to the PTI report.
A Tax Break for Everyday Essentials
As per the PTI report, one of the noteworthy proposals from the GoM is the reduction of the GST on 20 litre packaged drinking water bottles, bicycles, and exercise notebooks. Currently taxed at 18 per cent, these items could see their rates drop to 5 per cent if the recommendations are accepted by the GST Council.
A Closer Look
Packaged Drinking Water- The proposal suggests lowering the GST on 20 litre bottles from 18 per cent to 5 per cent, according to the PTI report
Bicycles- For bicycles priced below Rs 10,000, the tax rate could be slashed from 12 per cent to 5 per cent.
Exercise Notebooks- Students and parents will benefit as GST on exercise notebooks may decrease from 12 per cent to 5 per cent.
According to PTI reports, these changes are projected to yield a revenue gain of Rs 22,000 crore for the government.
A Price Hike on High-End Luxuries
On the other end, the GoM has proposed a surge in GST rates on certain luxury items. The suggestions include:
High-End Shoes- For shoes priced over Rs 15,000, GST could rise from 18 per cent to 28 per cent.
Luxury Wrist Watches- Similar treatment is proposed for wrist watches costing more than Rs 25,000, also seeing a hike to 28 per cent, added the report.
The GoM's recent discussions also touched on a range of other goods, considering adjustments across more than 100 items. Essential items like hair dryers and beauty preparations that currently fall under the 18 per cent slab may see a return to the higher 28 per cent bracket, added the report.
