The alcohol and tobacco industries will likely pay more taxes towards an additional ‘sin tax’ under the proposed goods and services tax (GST) structure. However, the govt has not specified the rate at which this ‘sin tax’ would be levied. Here are top 5 key takeaways from the proposed move:
1. ‘Sin tax’ is a globally prevalent practice under which products like alcohol and tobacco attract higher rates of tax
2. Typically, ‘sin tax’ is an excise tax that is levied on products and services considered to be bad for health or society such as alcohol, tobacco and gambling
3. These additional taxes are also seen as efforts to discourage people from the use of such products or services
4. Such taxes are often the most common measures by the governments to shore up their tax revenues as people generally refrain from opposition to such levies, as they are indirect in nature and affect only their end users
5. Govt is waiting for comments and suggestions from the industry. After making necessary changes based on those suggestions, a final report would be placed before the GST council before the final GST law is framed.
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