35% GST On Tobacco & Aerated Beverages, Hike On Other Items Including Cosmetics and Handbags: Report

The first Winter session of the 18th Lok Sabha is currently underway, and some crucial legislative pieces are expected to be introduced in this session.
Amidst the chaos of myriad adjournments, another pertinent news has emerged.

Additional Tax On Tobacco and Aerated Beverages

According to multiple reports that have been circulating over the past few hours the Union Government is expected to impose a new tranche of taxes or ‘special rate’ on multiple products.

The biggest highlight of this report is a flat 35 per cent additional tax on tobacco and tobacco-related products (gutka, cigarettes, etc).

In addition, this 35 per cent rate is also expected to be imposed on aerated beverages (Pepsi, Coca-Cola, Fanta, etc).In addition, the government is also expected to impose a 5 per cent GST on ready-made garments or RMGs worth Rs 1,500.

And others costing between Rs 1,500 and Rs 10,000 may attract 18 per cent GST. Also, RMGs worth more than Rs 10,000 may attract a GST of 28 per cent, which is currently the highest slab in the country.

Apart from the aforementioned changes, the government is also expected to hike GST rates on other major consumer products. This includes watches, cosmetics, shoes, and handbags, apart from other goods.

The Middle Maelstorm

This comes to pass after a year of myriad questions that have been raised and pointed at the Centre over its treatment of the country's purported 'Middle-Class'. Earlier in the year, post Nirmala Sitharaman's full budget in July, post the 2024 General Elections, the aforementioned 'Middle Class' was said to be let down.

Many observed that the budget with its taxation system made it difficult for the earning class to exercise their abilities to consume. This had led to a great deal of criticism of the FM and her government.