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GST collection this June surged over 6.2 percent to cross Rs 1.85 lakh crore, compared to the same period last year.

TRENDING NOW

Several everyday and other items will get more expensive if a new government proposal to amend the Goods and Services Tax system is passed. Under the proposal, the expiring compensation cess will be replaced with fresh cesses, particularly targeting tobacco products and costly automobiles. A cess is an additional tax levied on select goods and services over and above the applicable GST. According to a report by NDTV, a panel comprising a group of ministers chaired by the junior Finance Minister Pankaj Chaudhary is expected to discuss the matter later this month.

Cess to target 'sin' goods
The new cess will apply to the so-called "sin" goods -- referring to products usually taxed at higher rates due to their perceived negative impact on the society -- as well as others in the higher 28 percent GST bracket. These include tobacco products such as cigarettes, and carbonated beverages like cola. The cess will also target high-end cars and coal, in alignment with Prime Minister Narendra Modi-led government's overall push towards renewable energy sources, which are more environment-friendly. The group of ministers is close to an agreement as most state governments are expected to accept the proposal.

Relief for middle class on the cards
Meanwhile, reports say that talks underway over reducing the number of GST slabs, possibly by doing away with the 12 percent tax slab. If passed, this will mean some products currently taxed at 12 percent will fall into the lower tax bracket of five per cent, while others will be taken into the higher 18 percent slab. Everyday products such as toothpaste and footwear will likely become cheaper as a result, bringing much relief for the middle class and economically weaker sections.
GST collection this June surged more than 6.2 percent to cross Rs 1.85 lakh crore, compared to about Rs 1.74 lakh crore in the same period last year, according to official data released on Tuesday.

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