The Goods and Services Tax (GST) Council may refer the issue of GST rates on cigarettes and bidis to the Rate Rationalisation Committee, with a proposal to reduce the maximum tax rate from the current 28% to 20% under both CGST and SGST, sources told Business Today on Tuesday.

The Centre recently announced the next GST Council meeting on June 22, following an eight-and-a-half-month hiatus since the last meeting. While the agenda is not yet disclosed, state Finance Ministers are expected to propose adjustments to the indirect tax system for the upcoming Union Budget.

The Fitment Committee may recommend reducing the GST rate on aircraft parts and components for maintenance from 18% to 5%.

Additionally, the GST Council is expected to consider reducing the GST rate on carton boxes for packaging apples from 18% to 12%, and on solar cookers from 18% to 5%.

The law committee has requested the GST Council to exempt aerated beverages from the 12% compensation cess.

Reports indicate that both consumers and industry stakeholders are keenly awaiting updates on the future of the GST Compensation Cess, initially implemented for the first five years of the GST regime starting in July 2017. The levy, intended to compensate states, had been extended after the pandemic.

At the Council’s recent meeting on October 7, 2023, led by the Finance Minister, discussions began on introducing an additional cess or surcharge post-March 2026, following the expiration of the current GST Compensation Cess.