GoM Proposes GST Hike on Tobacco, Drinks to 35%

| |

The GST Council is considering a significant change. The GoM is proposing a hike in the goods and services tax (GST) on everyone’s favorite bubbly drinks, cigarettes, and tobacco products.

Why is the GoM Proposing GST Hike on Tobacco and Drinks?

Right now, tobacco and fizzy drinks fall under the 28% slab. The group of ministers (GoM) has proposed increasing the GST rate on tobacco and drinks to 35%.

This reform, aimed at rationalising GST rates, is projected to increase government income significantly. Another reason behind this change is to discourage the consumption of tobacco products due to their health risks.

Effect of GST Hike on Tobacco & Drinks to 35%

Price Increases for Consumers

With higher taxes, prices for GST on tobacco and GST on aerated drinks will increase. This could discourage consumption but might also cause strain on budgets for many.

Challenges for Manufacturers

Producers in these sectors might face a decrease in  demand and higher compliance requirements, including GST  Return filing and GST payment obligations.

Revenue Growth for the Government

The higher indirect tax rates aim to boost revenue collection. Higher revenue can be used for developmental projects.

Conclusion

In conclusion, the GST Council’s decision on December 21 will bring clarity to the proposed adjustments. If approved, this increase will represent a significant shift in the GST rate rationalisation strategy. Businesses and consumers should remain alert, informed and prepared for the changes.

Take a call from Expert

Moreover, If you want any other guidance relating to GST RegistrationGST Return Filing or GST Updates, please feel free to talk to our business advisors at 8881-069-069.

Download the E-Startup Mobile App and Never miss the latest updates narrating to your business.

Previous

How To Start Crypto Trading Business In Dubai?

How To Start A Quick Commerce Business?

Next

Leave a Comment