New GST Rates for Cigarettes, Tobacco, and Soft Drinks: Check the Updated Rates Here

The Group of Ministers (GoM) on GST rate rationalization has suggested raising the tax on items like aerated drinks, cigarettes, and other tobacco products from 28% to 35%, according to the news agency PTI. As per the sources, this decision is likely aimed increase the revenue collected by adjusting tax rates on specific goods.

The Group of Ministers (GoM), led by Bihar Deputy Chief Minister Samrat Choudhary, met on Monday to finalize changes to GST rates. 

Increased Taxes on ‘Sin Goods

Along with the increase for "sin goods," there was also discussion on modifications to the GST system for clothing and other commodities.

• Items costing up to ₹1,500: 5% GST
• Items priced between ₹1,500 and ₹10,000: 18% GST
• Items above ₹10,000: 28% GST

Overall, the GoM proposed tax changes for 148 items. It is anticipated that these modifications will increase the income of the state government.

GST Council to Review Tax Changes

The GST Council will hear the GoM's report on December 21, 2024. The ultimate decision about the suggested adjustments will be made by the council, which is chaired by the Union Finance Minister and includes state finance ministers.

"The GoM has consented to suggest a special rate of 35% on aerated beverages, tobacco products, and related goods. The additional 35% rate will be added to the current four-tier tax structure of 5%, 12%, 18%, and 28%," said a government official as reported by PTI.

Current GST Structure

Under the current GST system, basic items like food, and clothes are either not taxed or taxed at the lowest rate, while luxury and harmful goods are taxed at higher rates. The government has levied an additional cess on top of the highest 28% tax rate on Luxury items like cars and washing machines, as well as harmful goods like aerated drinks and tobacco.

The GoM’s suggestions will help the council decide if there is room for further changes in tax rates. The council may also choose to give the GoM the responsibility of regularly reviewing GST rates.

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