Rama Krishna Sangem
New GST rates will come into force from this month, September, 22. The Centre is saying that this is GST reforms 2.0 which simplifies and reduces indirect taxes on the public. Four slabs – 5, 12,m 18 and 28 per cent tax – are cut to just two – 5 and 18 per cent. But, be aware, that a new slab is created, that is 40 per cent and many more items are placed in it that may hit ordinary people. This 40 per cent slab called sin goods category.
GST tax rate change: The highest slab has been designed for luxury and non-essential goods such as high-end vehicles, aerated drinks and tobacco products. India’s indirect tax system is set for a major reset from September 22, when a new 40% GST slab comes into force. This change marks the removal of the 12% and 28% brackets, leaving behind just three – 5%, 18% and the newly introduced 40%.
The highest slab has been designed mainly for luxury and non-essential goods such as high-end vehicles, aerated drinks and tobacco products. While cigarettes have been slotted into the 40% bracket, this doesn’t automatically mean prices will shoot up – other factors play a role. For pan masala, gutka and chewing tobacco, the higher rate will kick in later due to unresolved technical issues linked to pending industry loans.
Dy CM Bhatti demands share for states
Telangana Deputy CM Mallu Bhatti Vikramarka has called on Union Finance Minister Nirmala Sitharman in New Delhi and demanded that states should be given a fair share in the sin tax category revenue. He is foremost among the state FMs in asking for a compensation for at least five years on the revenue loss, that occurs due to the reforms. Telangana is expected to lose at least Rs 500 crore tax revenue per month. Some analysts say it could be Rs 7,000 per year.
Full list of products with 40% GST
Tobacco and Pan Masala (Sin Goods): Pan masala, Gutka, Chewing tobacco, Unmanufactured tobacco and tobacco refuse (excluding leaves), Cigarettes, Cigars, cheroots, cigarillos, and similar substitutes. Aerated and Sugary Beverages, Carbonated drinks, Cold drinks with sugar, Caffeinated carbonated beverages.
Luxury Cars: Petrol cars with engine capacity above 1200 cc, Diesel cars with engine capacity above 1500 cc, 4. High-End Motorcycles, Motorcycles with engine capacity above 350 cc, 5. Super-Luxury Marine and Aircraft
Yachts: Personal aircraft, including helicopters
Other Sin or Luxury Items (broader category), Coal, lignite, peat, Online gambling and gaming services
