The Group of Ministers (GoM) on GST rate rationalisation on Saturday decided to reduce the tax rate on 20-litre water bottles, bicycles and exercise notebooks to 5 per cent. Besides, the GoM suggested raising the tax on expensive wrist watches and shoes, an official said. The decision of the GoM on GST rate rationalisation, headed by Bihar Deputy Chief Minister Samrat Choudhary, will lead to a revenue gain of Rs 22,000 crore, the official said. The GoM suggested reducing the GST on water bottles of 20 litres and above from 18 per cent to 5 per cent.

GST will increase on expensive shoes and watches

Apart from this, it was also recommended to reduce GST on practice notebooks from 12 percent to 5 percent. Similarly, it is suggested to reduce GST on bicycles priced below Rs 10,000 from 12 percent to 5 percent. The GST Council will take the final decision on these recommendations. The GoM also suggested increasing GST from 18 percent to 28 percent on shoes priced above Rs 15,000 and wrist watches priced above Rs 25,000. The six-member GoM also includes Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh, Karnataka Revenue Minister Krishna Byre Gowda and Kerala Finance Minister K N Balagopal.

Insurance premium can be GST free

The premium paid for life insurance and health insurance by senior citizens can be exempted from tax. A senior official gave this information on Saturday. In the meeting, it was decided to exempt from GST the premium paid for health insurance with coverage up to Rs 5 lakh for persons other than senior citizens. The final decision in this regard will be taken by the GST Council.