No GST Council proposal on 35% rate on tobacco and alcoholic beverages: MoS Finance

Minister of State for Finance Pankaj Chaudhary on Friday said that the Goods and Services Tax Board has not discussed any proposal to raise tax to 35% on tobacco and alcoholic beverages.

“There has been no discussion on such a proposal in the GST Council,” he told reporters at a press conference on Friday. Any election will be based on the consensus of all countries, he emphasized.

He was responding to a question on reports indicating that the Group of Ministers on leveling the rate under GST has recommended raising the rate of tobacco and aerated drinks to 35%. The GST Council is expected to meet in Jaisalmer on December 21 where it is expected to take the GoM’s report on price regulation under the GST.

Meanwhile, speaking to the media, Chaudhary asserted that the BJP-led NDA government has been increasing its investment in infrastructure and hopes to achieve the target of Rs 11.11 lakh crore in the capital expenditure.

“All ministries must meet their capex targets for the end of the financial year. We are confident that the capex target for the current financial year will be met,” he said.

Recently, there have been concerns about the government’s ability to meet its capex target. The Center has spent only Rs 4.6 lakh crore or about 42% of its full-year target for FY25 between April and October 2024 though we expect it to increase the amount in the remaining months.

The MoS also stressed that states were taken capex loans based on their demand. As part of the capex focus, an amount of Rs 1.5 lakh crore has been earmarked in FY25 as capex loans to the states, some of which are linked to reforms and other initiatives.

The MoS also indicated that the government’s expenditure has increased from Rs 5 lakh crore in 2021-22 to Rs 11.11 lakh crore in 2024-2025. He said that keeping in mind the goal set by Prime Minister Narendra Modi to make India a developed country by 2047, the government has been allocating the budget and will continue to do so in the upcoming Budget 2025-2026.