New Delhi: Speculations about a possible hike in GST rates on items like clothes, watches, cigarettes, tobacco, and cold drinks have created a stir, leading to public criticism. However, the Central Board of Indirect Taxes and Customs (CBIC), under the Ministry of Finance, has dismissed these reports as baseless rumors.
What Triggered the Speculation?
Media reports suggested that the Group of Ministers (GoM), constituted by the GST Council, was considering recommending a GST rate increase on 148 items as part of a rationalization exercise. This sparked concerns among businesses and consumers, with many expressing discontent over the potential financial burden.
CBIC’s Official Clarification
Responding swiftly, the CBIC clarified on social media that the GST Council has not made any decision to revise GST rates. “The recommendations of the GoM have not yet been submitted to the Council, and no report has been received by CBIC. The circulating reports are misleading and should be treated as rumors,” stated the CBIC.
GoM’s Role and Composition
The GoM was formed to study and recommend rationalization of GST rates. It is chaired by Bihar Deputy Chief Minister Samrat Chaudhary and includes ministers from Uttar Pradesh, Bihar, Rajasthan, Karnataka, West Bengal, and Kerala. The GST Council, led by Union Finance Minister Nirmala Sitharaman, includes finance ministers from all states and is the final decision-making authority on GST matters.
Rationalization, Not Revision
The GoM’s mandate is to streamline GST rates, ensuring a balanced tax structure while reducing complexities. However, any changes proposed by the GoM must be reviewed and approved by the GST Council before implementation.
Government on the Back Foot Amid Criticism
Reports of a potential hike drew widespread criticism, putting the government on the defensive. Many argued that increasing GST rates on essential and luxury items simultaneously would strain both household budgets and consumer sentiment.
What’s Next?
While the government has quashed the rumors for now, the GoM’s recommendations are awaited with anticipation. Policymakers face the challenge of balancing revenue generation with economic and social impacts.
Consumers and businesses are advised to rely on official announcements from the GST Council or the Ministry of Finance for accurate updates on tax policy changes.
