Sin Goods Explained: High-tax products targeted by GST Council’s 40% slab

Sin Goods are products that are considered harmful to health or society, so they are taxed more so that their use is reduced. This additional tax is used for public health and welfare.

New Delhi: The Goods and Services Tax (GST) Council has made a major change in the tax system and implemented a new special tax slab of 40%. This tax will be imposed on those products which are considered 'Sin Goods' means harmful items and luxury items. Its purpose is to reduce the consumption of these items and make the tax system more simple. Under this new slab, 40% GST will be levied on expensive items like pan masala, gutkha, cigarettes, tobacco products, sugary drinks, caffeinated beverages, big cars, heavy bikes, personal jets and yachts. This tax will replace the compensation cess.

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Finance Minister Nirmala Sitharaman has said that this change will benefit the general public as the tax on everyday needs like food items, grains and clothes will be only 5%. At the same time, household appliances like fridges, ACs and large TVs, which were earlier taxed at 28%, will now come under the 18% tax slab. According to experts, this reform will give relief to consumers as well as reduce tax revenue disputes between the states and the central government.

Three Slabs In New GST Structure

The new GST structure will now have only three tax slabs: 5%, 18%, and 40%. The 5% slab covers most everyday essentials, 18% includes household appliances, and 40% includes items that are considered harmful to health or luxury items.

What Are Sin Goods?

Sin Goods are products that are considered harmful to health or society, so they are taxed more so that their use is reduced. This additional tax is used for public health and welfare.

The 40% GST list includes pan masala, sugary and caffeinated beverages, all tobacco products, petrol cars above 1200cc, diesel cars above 1500cc, motorcycles with engines above 350cc, luxurWy yachts, personal jets, and revolvers-pistols. Apart from this, this tax will also be applicable on smoking related equipment.

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With this new tax structure, the government is trying to control the consumption of harmful and expensive products and provide relief to the general public on essential commodities. Along with this, the tax system should be made simple and transparent so that an equal and balanced tax system can be ensured for everyone.