CBIC issued Clarification on GST Rate Hike for Sin Goods; Recommendations yet to submit by GoM to GST Council

The Central Board of Indirect Taxes and Customs (CBIC) stated on Tuesday that the GST Council, which makes the final decisions about tax rate fixation, has not yet received the GoM’s recommendations on rationalizing the GST rate.

The Central Board of Indirect Taxes and Customs (CBIC) stated in a post on X that the group of ministers (GoM) is merely a “recommendatory” body and that the GST Council, which is chaired by the Union Finance Minister and includes state counterparts, has not yet discussed any changes to the GST rate.

The CBIC’s clarification followed reports that the GoM on GST rate rationalization had proposed raising the tax rate on sin goods, such as cigarettes, tobacco, aerated beverages, and associated products, from the current 28% to 35%.

“Any changes to the GST rate have not yet been discussed by the GST Council. Not even the GoM’s recommendations have reached the Council. In reality, the GoM has not yet completed and submitted its recommendations to the Council, following which the Council will make a final decision about the GoM’s recommendations,” the CBIC stated.

It stated that the GST Council has the authority to suggest changes to the GST rates.

In a post on X, Finance Minister Nirmala Sitharaman stated that the GoM’s finance ministers from different states are attempting to figure out changes in the GST rate.

“Following that, the GST Council, consisting of all state FMs will take up their recommendations, when they next meet,” Sitharaman stated.

A Group of Ministers (GoM) was established by the GST Council to investigate the rationalization of the GST rate in addition to a few other matters that the Council had referred.

The deputy chief minister of Bihar serves as the Convenor of the GoM, which is composed of ministers from the states of Bihar, Uttar Pradesh, Rajasthan, West Bengal, Karnataka, and Kerala.