Inflation Alert! GST on 143 items likely to increase next month, know more

The rising prices of essential commodities have become a cause of concern for people across the country. While the price of key commodities continues to show an upward movement, the GST Council now seeks inputs from the states about hiking the rates of 143 items, including, handbags, chocolates, chewing gums, perfumes/deodorants, apparel and clothing accessories among others.

According to reports by a leading daily, 92 per cent of the items included in the list of 143 will be shifted from the 18 per cent tax slab to the top 28 per cent slab. These items include, custard powder, watches, papad, power banks, colour TV sets (below 32 inches), suitcases, gur (jaggery), handbags, perfumes/deodorants, chocolates, ceramic sinks, wash basins, chewing gums, walnuts, goggles, frames for spectacles/goggles, non-alcoholic beverages, and apparel and clothing accessories of leather.

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As part of 143 items, papad and gur may be shifted to the zero to five per cent slab. Meanwhile, walnuts are expected be valued at GST rate of 12 per cent as against the existing five per cent rates. Table and kitchenware made of wood will also face a GST hike rom former 12 per cent to 18 per cent.

Further, the GST Council is also likely to consider a proposal to remove the five per cent slab by moving some goods of mass consumption to three per cent. Other goods may be shifted to the remaining eight per cent categories.

As of yet, there are four GST slabs – 5 per cent, 12 per cent, 18 per cent and 28 per cent. The third slab, which is 18 per cent, has 480 items and makes up for 70 per cent of the total GST collections.

Besides these, there is also an exempt list of items which include unbranded and unpacked food items that do not have any tax. According to a PTI report, the Council is likely to decide upon reducing the list of exempt items by shifting some non-food items to the 3 per cent slab.

Notably, the GST compensation regime will be ending in June. The council  had earlier set up a panel for suggesting ways to augment revenue by rationalising tax rates and making needed changes in the tax structure.