The proposed changes are expected to be revenue-positive and are likely to be discussed at the upcoming GST Council meeting on December 21.
The GST Group of Ministers (GoM) on rate rationalisation has finalised a report recommending significant changes to the tax rates on 148 items, including a major overhaul of the textile sector. The proposed changes are expected to be revenue-positive and are likely to be discussed at the upcoming GST Council meeting on December 21.
The GoM has focused on lowering the rates for commonly used items such as textiles, bicycles, and exercise books, while proposing an increase in the rates for several luxury goods to 28 per cent.
Regarding textiles, the GoM has proposed a revised slab structure, maintaining a 5 per cent rate for textile items priced up to Rs 1,500, but suggesting an 18 per cent tax for products priced between Rs 1,500 and Rs 10,000. For textiles priced above Rs 10,000, the report recommends a hike to 28 per cent, bringing them in line with luxury goods.
Currently, the GST rate for textiles is 5 per cent for items priced up to Rs 1,000 and 12 per cent for those above Rs 1,000.
The GoM, chaired by Samrat Chaudhary, Deputy Chief Minister, Bihar, met on December 2 and agreed on several GST rate changes aimed at simplifying the GST framework and boosting revenue collection. The report will be presented at the 55th GST Council meeting, scheduled for December 21 in Jaisalmer, chaired by Nirmala Sitharaman, Finance Minister.
The GoM has also proposed raising GST rates on several luxury items, such as high-end wristwatches and shoes, while recommending a reduction in GST on essential items like bicycles, exercise books, and large packs of packaged drinking water.