GST on cigarettes, tobacco, aerated beverages to be hiked to 35%? Know here

Several reports suggest that the Group of Ministers (GoM) on GST rate rationalisation has proposed to hike tax by 7 per cent on aerated beverages, cigarettes, tobacco and related products to 35 per cent. They also added that the GoM report is expected to be discussed by the GST Council on December 21 and a final decision on GST rate changes will be taken by the council. Currently, 28 per cent GST is levied on such products.

Did GoM recommend GST rate changes? 

The Central Board of Indirect Taxes and Customs, responsible for administering Indirect Taxes in India, said that such reports in public media based on GoM deliberations are premature and speculative. 

In a tweet, CBIC wrote, "The GST Council has not yet deliberated on any GST rate changes. The Council has not even received the recommendations of the GoM. In fact the GoM has yet to finalise and present its recommendations to the Council after which the Council will take a final view on the recommendations of the GoM." 

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There are various reports in the media regarding the Group of Ministers (GoM) recommendations on GST rate changes regarding various goods and services. The reports in public media on the basis of GoM deliberations are premature and speculative.

A Group of Ministers (GoM) was…

— CBIC (@cbic_india) December 3, 2024

The GST Council is chaired by the Union Finance Minister and includes Ministers of all the States/UTs, which is empowered to recommend GST rates including changes to them. The GoM is only a recommendatory body.  After the report on the GST hikes on cigarettes, tobacco and related products, shares of ITC, VST Industries and Varun Beverages declined in morning trade on Tuesday.