NEW DELHI: The Group of Ministers (GoM) on GST rate rationalization, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, has recommended significant adjustments in GST rates to balance affordability and revenue generation. In its latest meeting, the GoM suggested reducing the GST on 20-litre packaged drinking water bottles and bicycles costing less than Rs.10,000 from 12% to 5%. This move aims to make essential goods more accessible to the public.
Alongside these reductions, the GoM proposed raising GST rates on luxury items, such as high-end wristwatches and footwear priced above Rs.5,000, from 18% to 28%. This adjustment aligns with the government’s strategy of taxing luxury and sin goods at higher rates while keeping essential products more affordable for the average consumer.
Additionally, the GoM is exploring further tax cuts in the healthcare sector. A recent decision by the GST Council reduced taxes on life-saving cancer drugs from 12% to 5%, demonstrating a commitment to making healthcare more accessible. The Council also initiated discussions on extending lower GST rates to health and life insurance services, with final recommendations expected in the upcoming October 20 meeting.
If approved, these changes could generate an estimated revenue gain of Rs.22,000 crore for the government, helping to maintain fiscal balance while providing relief to consumers and businesses. The Council’s ongoing focus on GST simplification and rationalization aims to create a more transparent and efficient tax regime that supports economic growth.(Input from Agencies)
