No decision by GST Council on 35% rate on tobacco and aerated drinks: MoS Finance

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

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

He was responding to a question on reports suggesting that the Group of Ministers on rate rationalisation under GST has recommended raising the rate on tobacco and aerated drinks to 35%. The GST Council is set to meet in Jaisalmer on December 21 where it is expected to take up the report of the GoM on rationalisation of rates under the indirect tax levy.

Meanwhile, speaking to reporters, Chaudhary underlined that the BJP led NDA government has been consistently increasing its expenditure on infrastructure creation and is hopeful of meeting the Rs 11.11 lakh crore target set for capital expenditure this fiscal.

“All ministries should meet their targets for capex by the end of the fiscal. We are hopeful that the target for capex in the current financial year will be met,” he said.

Of late, there have been concerns about the government’s ability to meet the capex target for the fiscal. The Centre has spent just Rs 4.6 lakh crore or about 42% of its full year target for FY25 between April and October 2024 although there is expectation that it will ramp up spending in the remaining months.

The MoS also underlined that states have been taken capex loans based on their requirements. As part of the focus on capex, an amount of Rs 1.5 lakh crore has been earmarked in FY25 as capex loans to states, part of which is linked to certain reforms and criteria.

The MoS also highlighted that the government's capital expenditure increased from over Rs 5 lakh crore in 2021-22 to Rs 11.11 lakh crore in 2024-25. He further said that keeping in mind the goal set by Prime Minister Narendra Modi to make India a developed nation by 2047, the government has been making budget allocations and will continue to do so in the upcoming Budget for 2025-26.