GoM suggests higher GST rates for premium products, relief for senior citizens' health insurance
rate rationalisation, has suggested changes in rates of multiple goods, as well as moving of shoes and watches priced above a certain threshold to the 28% tax bracket, from 18% now. The suggestion to introduce a price-based determination for GST could push more premium products to the 28% slab, according to experts.
The group of ministers will meet again next month before finalising its report. The GST Council will take a final decision on any changes to the tax rate.
A separate group — looking into taxation of insurance products — has favoured exempting health insurance products for senior citizens and reducing tax to 5%, from 18% now, on products providing health cover up to Rs 5 lakh, sans any input tax credit.
“Every GoM member wants to give relief to people. Special focus will be on senior citizens. We will submit a report to the council. A final decision will be taken by the council,” said Samrat Chaudhary, deputy chief minister of Bihar, who is convenor of both the GoMs.
Rationalisation Focus
The GoM on rate rationalisation has favoured shifting shoes and apparel priced above Rs 15,000, and wristwatches above Rs 25,000, to the highest slab of 28%, from 18% at present — introducing the concept of pricebased GST rate. “While a watch is a daily-use item taxed at 18%, a luxury premium brand above Rs 15,000 should be treated as luxury good and taxed at 28% rate, and all members agreed to that,” a person aware of the deliberations told ET on condition of anonymity.
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