Group of Ministers (GoM) set up by the GST Council has proposed a new “special rate” of 35% for tobacco and aerated beverages, sources exclusive to CNBC-TV18 said.
Currently, all types of tobacco products attract a GST rate of 28%, except for tobacco leaves, which are taxed at 5% under the reverse charge mechanism. This means the recipient, rather than the supplier, is responsible for remitting the GST to the government.
Additionally, a compensation cess is levied on tobacco products over and above the 28% GST, making them among the most heavily taxed items under the GST regime.
Tobacco products are among the items subject to the highest GST cess rates, ranging from 11% to 290%. Therefore, it is crucial for all suppliers of tobacco and related products to stay informed about the applicable GST cess rules and regulations.