GST Update: Tobacco Products, Cold Drinks and Private Jets to Attract 40% Tax

New Delhi (The Uttam Hindu) : The central government implemented new GST rates on Monday. Under the new GST framework, the government has reduced the number of tax slabs to two – 5 percent and 18 percent – ​​from the previous four – 5 percent, 12 percent, 18 percent and 28 percent.

Additionally, a separate 40 percent tax has been imposed on sin goods and luxury goods. Sin goods are products that are harmful to health, and to discourage their consumption, the government has placed them under a 40 percent tax bracket.

After the new GST rates come into effect, pan masala, gutkha, cigarettes, tobacco and zarda will be subject to a 40 percent cess plus applicable tax. This cess will continue until the outstanding cess-linked loans are cleared.

Cold drinks and aerated water with sugar will now be subject to a 40 percent GST. However, they previously attracted a 28 percent GST plus a 12 percent cess. Therefore, their prices will remain unchanged.

Additionally, race clubs, leasing, casinos, horse racing, and lotteries will be taxed at 40 percent. GST on IPL tickets has also increased to 40 percent. The government has also imposed a 40 percent tax on aircraft used for personal consumption, up from the previous 28 percent plus a 3 percent cess.

Under the new GST framework, the government has increased the tax on bikes with a capacity of more than 350 cc to 40 percent. This will increase the prices of higher-capacity bikes.

At the same time, the government has increased the tax to 40 percent on petrol vehicles over 1,200 cc and 4 meters, and diesel vehicles over 1,500 cc and 4 meters. However, previously, these vehicles were taxed at 50 percent, including 28 percent GST and cess. Therefore, the new GST rates will likely reduce the prices of larger vehicles.

GST reform has reduced taxes on around 370 products, including everyday essentials and life-saving medicines.

Union Finance Minister Nirmala Sitharaman announced that the aim of this change is to inject around Rs 2 lakh crore into the economy by increasing the disposable income of consumers.