The Group of Ministers (GoM) on GST rate rationalization has proposed increasing the tax rate on aerated beverages to 35% from the existing 28%. The four-tier GST structure—5%, 12%, 18%, and 28%—will remain unchanged, with the addition of the new 35% tax slab targeting luxury and demerit goods. “This new rate will positively impact net revenue,” said an official, emphasizing that these changes are part of a broader push to streamline the GST framework.
The GoM, led by Bihar Deputy Chief Minister Samrat Chaudhary, also suggested tax rate changes for 148 items. These recommendations include lower GST rates for essential goods and higher rates for luxury items.
Proposals under consideration are to put aerated drinks at a 35% GST rate.
The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, is set to review these proposals in its December 21 meeting. Final decisions will determine whether the GoM will continue periodic rationalization.
In recent tax adjustments, the GoM had earlier suggested reductions in GST for essential items, such as packaged water (20 litres or more), which is reduced from 18% to 5%.
Meanwhile, Chandigarh reported a 20% increase in GST collections for November 2024, reaching ₹253 crore compared to ₹210 crore in the same period last year. October collections also saw a 16% year-on-year increase. These measures underline the government’s dual focus on revenue generation and ensuring essential goods remain affordable.