According to reports, a new slab of 35 percent for tobacco, tobacco products, and aerated drinks was suggested by the Group of Ministers (GoM) on GST rate rationalization, which was chaired by bihar Deputy chief minister Samrat Chaudhary. At the moment, these goods cost 28% GST. These goods are regarded as "Sin Goods" by the GoM.

Products and services that are seen to be detrimental to society are subject to a sin tax. This includes things like gambling, alcohol, and tobacco products. Additionally, there is a 12% compensation tax on carbonated beverages. After raising the overall tax to 40%, this next GST increase will raise it to 47%.

It's a separate matter entirely, though, why governments still permit the selling of these goods. In order to discourage usage, the government now permits the items, makes them extremely expensive, and collects money through high tax rates. The cost of these goods will increase once the GST Council adopts these proposals. It should be mentioned that, like cigarettes, aerated beverages commonly referred to as "cool drinks" are also regarded as "sin goods."
 
Numerous studies have demonstrated that aerated beverages, particularly those with high sugar content, can lead to a host of severe health issues, such as obesity, diabetes, body weight, heart issues, stomach issues, cancers, liver damage, poor bone and tooth health, kidney failures, poor metabolism, and even infertility in women. As is well known, india is the global center for diabetes and obesity. The price of the aerated drinks is the true problem, despite the constant belief that the government is attempting to enrich itself in the name of public health.
 
200 ML of these beverages can be purchased for as little as 20 Rupees, while a 2.25-liter bottle will cost, at most, 100–110 Rupees. Furthermore, they are absurdly discounted by supermarkets and online platforms. Additionally, it's likely that no other product is as widely accessible to end customers. To give you an idea of the size of the sector, the indian market for carbonated soft drinks generated $18.25 billion in 2022, while 9.29 billion liters were consumed overall. Apart from the tax revenue, it remains to be seen if this increase would have a significant role in reducing the use of these carbonated beverages. Instead of imposing a general tax, the business has begun to demand that taxes be depending on the amount of sugar in the beverages.
 
Many nations, including Thailand, France, and the United Kingdom, have implemented the sugar-layered tax system. Companies were encouraged to lower the amount of sugar in their beverages by the tax system. Naturally, the corporations want to be in a lower-paying bracket. Major brands have already introduced "Diet" or "Zero" versions of their drinks. We'll have to wait and see if the GST Council will support sugar-free or low-sugar beverages. The sugar-layered tax concept may be used if the true goal is public health rather than income creation.
 

 
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G GOWTHAM

08/12/2024 10:00 AM