GST Rate Increased On Cigarettes, Tobacco And Aerated Beverages!

GST On Cigarettes, Tobacco And Aerated Beverages

The Group of Ministers on GST rate has agreed to increase tax on Beverages – Aerated, Cigarettes, Tobacco and other related products by 7 percent that is upto 35 percent. At present 28 per cent Goods and Service Tax (GST) is charged on such products.

The GoM report is to be taken up for deliberation in the GST Council meeting on December 21. It with regard to the final decision on rate changes will lie in the council. The GoM also made some recommendations to reform and rationalise tax rates on apparels. 

Accordingly, garments of up to Rs 1,500 were slabs at 5 per cent GST, garments between Rs 1,500 and Rs 10,000 at 18 per cent. As for the current recording, garments which cost above Rs 10,000 would now pay 28 per cent tax. It is currently administered as a four-tier structures of tax with rates at five percent, twelve percent, eighteen percent and twenty-eight percent.

In all, the GoM on rate rationalisation will suggest change in the tax rate on 148 items to be tabled before the GST Council. ”There will be positive net revenue impact but regional variation,” an official said. The GoM has agreed to recommend a special rate of 35 percent on tobacco products and related products and aerated beverages.

The 5%,12%,18%, and 28% of the tax slabs will remain intact and for the new rate the GoM has proposed it to be 35%, an official added. ITC, VST Industries and Varun Beverages were dragged down in Tuesday’s early trade after a report indicated that GST has been hiked on cigarettes, tobacco and other related products.