On December 3, 2024, the Goods and Services Tax Council met in Jaisalmer to discuss important pre-budget consultations and health-related matters. Among the key decisions made were the proposal to increase GST on cigarettes, tobacco, and beverages to 35%, and the request for an extension for the GoM to submit its report on GST compensation cess. The Council also planned to discuss potential tax cuts for non-alcoholic beverages based on sugar and the rationalization of GST rates. Additionally, the meeting aimed to address concerns surrounding the GST on health insurance and the potential reduction of insurance levies.
GST Council to Increase Tax on Cigarettes, Tobacco, and Beverages to 35%
The Goods and Services Tax (GST) Council, which is a federal body responsible for setting tax policies in India, met in Jaisalmer on December 3, 2024, to discuss significant pre-budget proposals and health-related matters. One of the most important decisions made by the Council was to propose an increase in the GST rate on cigarettes, tobacco, and beverages to 35%.
Background
The current GST rate on cigarettes and tobacco is 28%, while the rate on beverages is 18%. The proposed increase is part of the government's ongoing efforts to discourage tobacco use and promote healthier lifestyles. In addition, the Council also requested an extension for the Group of Ministers (GoM) to submit its report on GST compensation cess.
Other Discussions
In addition to the proposed GST rate increase, the Council also discussed potential tax cuts for non-alcoholic beverages based on sugar content. The Council also considered the rationalization of GST rates, with a focus on simplifying the tax structure and reducing the number of tax slabs.
Concerns Raised
During the meeting, concerns were raised about the GST on health insurance and the potential reduction of insurance levies. The Council acknowledged these concerns and agreed to further deliberate on these issues.
Top 5 FAQs
1. Why is the GST Council proposing an increase in tax on cigarettes, tobacco, and beverages?
The proposed increase is part of the government's efforts to discourage tobacco use and promote healthier lifestyles.
2. What is the current GST rate on cigarettes, tobacco, and beverages?
The current GST rate on cigarettes and tobacco is 28%, while the rate on beverages is 18%.
3. What is the proposed GST rate increase on cigarettes, tobacco, and beverages?
The proposed GST rate increase is 35%.
4. What other issues did the GST Council discuss at the meeting?
The Council also discussed potential tax cuts for non-alcoholic beverages based on sugar content, the rationalization of GST rates, and concerns about the GST on health insurance.
5. When will the proposed GST rate increase take effect?
The proposed GST rate increase is subject to approval by the Indian Parliament and is expected to take effect in the upcoming budget session.
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