As per the recommendations, readymade garments costing up to ₹1,500 would attract 5% GST, and those between ₹1,500 and ₹10,000 would attract 18%. Garments costing above ₹10,000 would attract a 28% tax, sources privy to the developments told CNBC-TV18.
The GoM report is expected to be discussed by the GST Council chaired by the Union Finance Minister and comprising her state counterparts on December 21. A final decision on GST rate changes will be taken by the council.
Also Read: Exclusive | GoM proposes ‘special rate’ beyond existing slab to offset potential revenue loss: Sources
Further, GoM on GST rate rationalisation proposed to hike tax on sin goods like aerated beverages, cigarettes, tobacco and related products to 35% from the present 28%, sources said.
In total, the GoM on rate rationalisation will propose tax rate tweaks on 148 items to the GST Council. Currently, GST is a four-tier tax structure with slabs at 5, 12, 18, and 28%.
Under GST, essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury goods like cars, and washing machines, and demerit goods like aerated water and tobacco products attract cess on top of the highest 28% slab.
Also Read: Exclusive | GoM recommends 35% GST on tobacco, aerated drinks: Sources
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