A panel of state ministers has recommended changes to the Goods and Services Tax (GST) structure, specifically targeting sin goods, including tobacco products, aerated beverages, and luxury cars. These goods are currently taxed at the highest 28% GST rate, along with an additional cess. The proposal, which is part of a rate rationalisation report, is set to be presented before the GST Council in its upcoming meeting later this month. The Group of Ministers (GoM), led by Bihar Deputy Chief Minister Samrat Chaudhary, has suggested differentiating sin goods from demerit goods under the GST regime.

In addition to these proposals, the panel has recommended adjustments to the GST rates for about 150 items, including readymade garments. The GoM is also looking to expand the list of products taxed at the 28% rate. This includes products ranging from air conditioners to luxury cars and aerated drinks. The suggested changes come ahead of the end of the current compensation cess, which is set to expire in March 2026. The GST Council is expected to discuss these recommendations in its meeting on December 21.

Earlier proposals from the GoM included reducing the GST on packaged drinking water bottles (20 litres and above) from 18% to 5% and lowering the GST on bicycles priced under Rs 10,000 from 12% to 5%. Additionally, the GoM suggested increasing the GST on shoes priced above Rs 15,000 and wristwatches above Rs 25,000 from 18% to 28%. The final decision on these rate changes will be made at the upcoming GST Council meeting.