Proposed 35% GST Rate on Aerated Beverages and Tobacco Triggers Market Declines

A new tax proposal by India's Group of Ministers suggests a 35% GST rate for select goods, impacting stocks and sparking public backlash.

The Group of Ministers (GoM) has recommended introducing a 35% GST rate on aerated beverages and tobacco products, up from the current 28% rate plus a 12% compensation cess.
The proposal also includes increased GST rates for items like cosmetics, watches, handbags, and certain ready-made garments, potentially affecting consumer spending patterns.
Shares of companies like Varun Beverages, ITC, and Godfrey Phillips saw declines on December 3, reflecting market concerns over the proposed tax hikes.
Public reaction on social media has been overwhelmingly critical, with many expressing frustration over the potential financial strain on middle-class consumers.
The GST Council is scheduled to meet on December 21 to review the recommendations, with a final decision yet to be made.