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A group of ministers (GoM), tasked by the Goods and Services Tax (GST) Council to look at rate rationalisation , has suggested changes in rates of multiple goods, as well as moving of shoes and watches priced above a certain threshold to the 28% tax bracket, from 18% now. The suggestion to introduce a price-based determination for GST could push more premium products to the 28% slab, according to experts. The group of ministers will meet again next month before finalising its report.
The GST Council will take a final decision on any changes to the tax rate. A separate group — looking into taxation of insurance products — has favoured exempting health insurance products for senior citizens and reducing tax to 5%, from 18% now, on products providing health cover up to Rs 5 lakh, sans any input tax credit. “Every GoM member wants to give relief to people.
Special focus will be on senior citizens. We will submit a report to the council. A final decision will be taken by the council,” said Samrat Chaudhary, deputy chief minister of Bihar, who is convenor of both the GoMs.
ET Bureau Rationalisation Focus The GoM on rate rationalisation has favoured shifting shoes and apparel priced above Rs 15,000, and wristwatches above Rs 25,000, to the highest slab of 28%, from 18% at present — introducing the concept of pricebased GST rate. “While a watch is a daily-use item taxed at 18%, a luxury premium brand above Rs 15,000 should be treated as luxury good and taxed at 28% rate, and all members agreed to that,” a person aware of the deliberations told ET on condition of anonymity. Office Productivity Zero to Hero in Microsoft Excel: Complete Excel guide 2024 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Astrology Vastu Shastra Course By - Sachenkumar Rai, Vastu Shashtri View Program Marketing Digital Marketing Masterclass by Neil Patel By - Neil Patel, Co-Founder and Author at Neil Patel Digital Digital Marketing Guru View Program Legal Drafting Commercial Contracts and Dispute Resolution By - Shafaq Uraizee Sapre, Managing Partner: Mumbai, Chandhiok and Mahajan View Program Legal Data Privacy with General Data Protection Regulation (GDPR) By - Arun S.
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The GoM has favoured reducing tax on packaged drinking water of 20 litres and above to 5% from 18% at present, bicycles costing less than Rs 10,000 to 5%, from 12%, and exercise notebooks to 5%, from 12%. Tax Increase for Some Items The increase in tax rates of some items is being examined to make good any possible revenue loss on account of lowering the tax rate on goods used by the common people. The fitment committee under the council may prepare a detailed list of such items and discuss it in the next meeting, according to a person cited earlier.
Currently, GST has a four-tier tax structure with 5%, 12%, 18% and 28% slabs. Insurance Taxation: The GoM on insurance discussed the suggestion by the fitment committee at length and was not in favour of blanket exemption on health insurance, considering the revenue implication. It remained divided on term insurance, with some members favouring exemption.
The panel will include both views in its detailed report, which it is likely to submit by October 31, said people familiar with the matter. (You can now subscribe to our Economic Times WhatsApp channel ).
