GST rates to be cut on 20 litre water bottles and bicycles to 5%, raised for luxury shoes, watches, and beauty products.
New Delhi : Accepting the demands of the opposition, the Group of Ministers (GoM) has recommended a major concession in GST on life insurance and health insurance premiums. However, this additional 'benefit' comes at a cost. The GST Council is set to announce a decision to raise the GST on several products to offset potential revenue losses.
According to sources, a decision to adjust the GST rates on various products was made during the GoM meeting, convened by the GST Council on Saturday. The proposed hike primarily targets luxury goods. For instance, GST on watches priced above Rs. 25,000 is expected to rise from the current 18% to 28%. Similarly, GST on shoes costing more than Rs.15,000 will also increase from 18% to 28%.
On the other hand, the GoM has also proposed reductions in GST for several daily essentials. For example, the GST on 20-liter water jars is set to decrease from 18% to 5%, and bicycles priced under Rs.10,000 will see a GST reduction from 12% to 5%.
In reality, while the government's GST relief on life and health insurance aims to promote the sale of these eco-friendly products, it may strain the central exchequer. If this happens mid-year, it could lead to an increase in the fiscal deficit. To counterbalance this, the decision to raise taxes on luxury shoes and watches is being considered. According to government sources, if these changes are implemented, the additional tax revenue could amount to Rs. 22,000 crore annually.
 |
| Image : Pexels |
New Delhi : Accepting the demands of the opposition, the Group of Ministers (GoM) has recommended a major concession in GST on life insurance and health insurance premiums. However, this additional 'benefit' comes at a cost. The GST Council is set to announce a decision to raise the GST on several products to offset potential revenue losses.
According to sources, a decision to adjust the GST rates on various products was made during the GoM meeting, convened by the GST Council on Saturday. The proposed hike primarily targets luxury goods. For instance, GST on watches priced above Rs. 25,000 is expected to rise from the current 18% to 28%. Similarly, GST on shoes costing more than Rs.15,000 will also increase from 18% to 28%.
On the other hand, the GoM has also proposed reductions in GST for several daily essentials. For example, the GST on 20-liter water jars is set to decrease from 18% to 5%, and bicycles priced under Rs.10,000 will see a GST reduction from 12% to 5%.
In reality, while the government's GST relief on life and health insurance aims to promote the sale of these eco-friendly products, it may strain the central exchequer. If this happens mid-year, it could lead to an increase in the fiscal deficit. To counterbalance this, the decision to raise taxes on luxury shoes and watches is being considered. According to government sources, if these changes are implemented, the additional tax revenue could amount to Rs. 22,000 crore annually.
Post a Comment