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‘Sin goods’ or ‘demerit goods’ are items deemed harmful to health or society and are taxed at the highest rate
A special 40 percent slab has been proposed for a select few items such as high-end cars, tobacco and cigarettes. (Image for representation)
The all-powerful GST Council on Wednesday approved a complete overhaul of the tangled Goods and Services Tax regime.
As part of this reform, a special 40 percent slab has been proposed for a select few items such as high-end cars, tobacco and cigarettes – often referred to as “sin goods” or “demerit goods”.
When it comes to GST, ‘sin goods’ comprise SUVs, tobacco, carbonated drinks, online gambling and gaming, luxury or harmful items that are subject to the highest tax plus cess. This is to reduce the negative social or health impact in India from the use of these products.
Sin goods under GST include tobacco, pan masala, gutkha, cigarettes, luxury cars, online gambling or gaming, caffeinated beverages, coal, lignite, peat, and aerated drinks.
Due to social or health concerns, these products attract the highest tax, which has been increased from 28 to 40 percent.
In addition to GST, these goods also attract a compensation cess, meant to curb consumption and boost revenue. For instance, for now, chewing tobacco attracts a 96 percent cess.
Alcohol remains outside GST ambit and continues to be separately taxed by states through excise duties.
Finance Minister Nirmala Sitharaman said tobacco, gutkha, tobacco products and cigarettes will continue to be charged at current 28 percent plus a compensation cess till such time that loans taken to pay states for revenue loss is fully paid back. It has been decided that the GST will be levied on retail sale price (RSP) instead of transaction value on pan masala, gutkha, cigarettes, unmanufactured tobacco, chewing tobacco like zarda.
Oindrila Mukherjee is a senior sub-editor who works for the rewrite and breaking news desks. Her nine years of experience in print and digital journalism range from editing and reporting to writing impactful st…Read More
Oindrila Mukherjee is a senior sub-editor who works for the rewrite and breaking news desks. Her nine years of experience in print and digital journalism range from editing and reporting to writing impactful st…Read More
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