GoM in India recommended lowering GST rates on water bottles, bicycles and exercise notebooks

The Group of Ministers (GoM) on GST rate rationalization has proposed reducing tax rates on 20-litre packaged drinking water bottles, bicycles, and exercise notebooks to 5% from their current rates of 18% and 12%, but suggested raising taxes on high-end wristwatches and shoes.

The GoM on rate rationalisation in its last meeting had discussed tax rate tweaks on over 100 items, including lowering taxes on certain goods from 12 to 5% to give relief to the common man. The GoM proposed reducing GST on packaged drinking water of 20 litres and above from 18% to 5%, and bicycles costing less than Rs 10,000 from 12% to 5%.

The GoM also suggested raising GST on shoes above Rs 15,000 a pair and on wrist watches above RS 25,000 from 18% to 28%. Some items with a GST of 18% like hair dryers, hair curlers, beauty products could go back in the 28% bracket.

This decision would lead to a revenue gain of ₹22,000 crore.

Currently, GST is a four-tier tax structure with slabs at 5, 12, 18 and 28%. Essential items are either exempted or taxed at the lowest slab, while luxury items attract the highest slab.