GST Rate Cut: 100 items including medicines and motorcycles will become cheaper, government may cut GST rate

New Delhi. The Group of Ministers (GOM) of the central government is planning to reform the GST rates. It includes 100 items. In the coming days, essential items including medicines and bikes may become cheaper. Some items, including bottled water and beverages, can be expensive.

Read :- 53rd meeting of GST Council under the chairmanship of Finance Minister Nirmala Sitharaman on June 22.

JIM will hold a meeting on October 20 on changes in Goods and Services Tax (GST) rates. In this there will be discussion on reducing the GST rate from 12 percent to 5 percent. GOM will place the recommendations before the GST Council. West Bengal Finance Minister Chandrima Bhattacharya said on Thursday that the discussion included important topics like motorcycles and bottled water.

The possibility of reducing tax rates on medical and pharmaceutical items was discussed in the GOM meeting last Wednesday. All these are in the 12 percent slab. The GoM is looking at the potential revenue loss from these cuts as an option to increase GST on some items such as aerated water and beverages, Bhattacharya said. 28 percent tax is imposed on these. Besides, cess can also be increased. Currently there are four GST slabs. Their rates are 5%, 12%, 18%, and 28%. The average GST rate in 2024 has become 11.56%, which is less than the revenue neutral rate of 15.3%.

Decision on insurance premium in November
The first meeting of the ministerial committee will be held on October 19 to decide on reducing the rates on health and life insurance premiums. There is 18 percent GST on insurance premium. There is a demand to remove or reduce this tax. The GST Council had decided to constitute a 13-member Group of Ministers to decide on the tax on this. The Group of Ministers has been directed to submit the report to the Council by the end of October. The final decision by the council on insurance premiums will be taken at its meeting in November.

Bicycle prices may also decrease
The Minister said, the Group of Ministers will deliberate on reducing the rates on bicycles used by the common people. There is a 12 percent tax on bicycles and their parts. It is five percent on e-cycle.

By law, tax can be up to 40 percent
Under the GST law, up to 40% tax can be imposed on goods and services. However, some items which were taxed at 18 per cent such as hair dryers, hair colors and make-up products may again fall in the 28 per cent slab. West Bengal suggested that the decision taken in the 23rd meeting of the GST Council should be reconsidered, in which tax rates on 178 items were reduced by removing the 28 per cent slab. Also, the common man will get relief by reducing the tax rate on goods to five percent. Bringing down the rate of food items from 12 percent to five percent will provide relief in the form of reduction in prices.