GST On 'Sin Goods': Pan Masala To Fruit Beverages — Items To Attract 40% Levy

The GST Council has announced its decision and reduced the existing tax slabs to two, that is — 5% and 18%; barring certain sin and luxury goods. Addressing the press, Finance Minister Nirmala Sitharaman said that certain "sin" and "super luxury goods" will come under a special GST rate of 40%.

These not only include tobacco-based items such as pan masala, cigarettes, chewing tobacco, gutka, and zarda, but also sweetened-aerated beverages along with aerated water.

"All goods containing added sugars and other sweetening elements, caffeinated beverages, carbonated beverages, fruit drinks, and carbonated beverages containing fruit juice, will come under 40%", the finance minister stated.

Among automobiles, motorcycles exceeding 350 CCs will come under the 40% rate.

Additionally, aircraft, aeroplanes, and helicopters operating for specifically personal use will be taxed 40%; "yatch and other vessels for pleasure and sports are all under 40%", the finance minister added.

While the new GST rates for all goods will be effective from Sept 22, tobacco items such as pan masala, cigarettes, chewing tobacco, gutka, and so on will continue at the existing rate along with cess charges till loans taken during pandemic are repaid. The loans are expected by the end of this calendar year.

Once an item has moved to 40%, there will be no additional levy, the finance minister added.