GoM for GST cut on educational items, hike for high-value apparel
The Group of Ministers (GoM) on GST rate rationalisation is understood to be in favour of reducing the tax rate on many items including ”education materials” to 5% from 12% to provide relief to large sections of people.
According to a source privy to the discussions held by the GoM in Goa on Wednesday, the panel also reached an understanding on a proposal to raise the rates of many textile and apparel items beyond a threshold price of Rs 1,000 from 5% now to 12% or 18%. The move, according to the source, would help in achieving “revenue neutrality”by raising the weighted average GST rate.
The revenue neutral rate (RNR) during the introduction of GST was determined at 15.5%, but the weighted average GST rate got reduced to below 11% due to reduction in tax rates in a large number of items since the indirect tax regime was rolled out in July 2017.
