Lucknow Press
New Delhi. The Group of Ministers (GOM) of the Central Government is planning to revise the GST rates. 100 items have been included in this. In the coming days, essential items including medicines, bikes may become cheaper. Some items including bottled water, beverages may become expensive.
The GoM will meet on October 20 to change the rates of Goods and Services Tax (GST). It will discuss reducing the GST rate from 12% to 5%. The GoM will place its recommendations before the GST Council. West Bengal Finance Minister Chandrima Bhattacharya said on Thursday, the discussion will cover important topics like motorcycles and bottled water.
In the GoM meeting held last Wednesday, the possibilities of reduction in tax rates on medical and drug related items were discussed. All these are in the 12 percent slab. Bhattacharya said, the GoM is looking at the possible revenue loss from these cuts as an option to increase GST on some items like aerated water and beverages. These are taxed at 28 percent. Along with this, cess can also be increased. Currently there are four GST slabs. Their rates are 5 percent, 12%, 18%, and 28%. The average GST rate in 2024 has become 11.56% which is less than the revenue neutral rate of 15.3 percent.
Decision on insurance premium in November
The first meeting of the ministerial committee will be held on October 19 to decide on reducing the rate of health and life insurance premium. There is 18 percent GST on insurance premium. There is a demand to remove or reduce this tax. The GST Council had decided to form a 13-member ministerial group to take a decision on the tax on it. The ministerial group has been directed to submit the report to the council by the end of October. The final decision on the insurance premium will be taken by the council in the meeting to be held in November.
The price of bicycles may also come down.
The minister said, the group of ministers will discuss on reducing the rate on bicycles used by common people. There is 12 percent tax on bicycles and its parts. There is five percent tax on e-cycles.
Legally tax of up to 40 percent can be levied
Under the GST law, goods and services can be taxed up to 40%. However, some items taxed at 18 percent such as hair dryer, hair colour and make-up products can again come under the 28 percent slab. West Bengal suggested that the decision taken in the 23rd GST Council meeting, in which tax rates on 178 items were reduced by removing the 28 percent slab, should be reconsidered. Along with this, reducing the tax rate on goods to 5 percent will provide relief to the common man. Bringing food items from 12 percent rate to 5 percent will provide relief in the form of reduction in prices.
