GST Revamp: 40% Tax on Sin Goods and Luxury Items Explained

• GST Council introduces a 40 percent tax rate for sin and luxury goods
• Sin goods include tobacco, sugary drinks, and other harmful products
• New tax slab aims to discourage consumption and generate revenue for welfare
• Items in the 40 percent slab include large cars, motorcycles, aircraft, yachts, tobacco products, and sugary beverages
• Tobacco products currently taxed at 28 percent plus Compensation Cess will move to 40 percent after state loans are cleared
• Larger cars face a reduced rate of 40 percent, down from 50 percent
• Electric vehicles remain at 5 percent
• Higher rates on sin goods aim to reduce consumption and support public welfare
• Sin goods have inelastic demand, ensuring steady tax revenue despite price increases

Source: a2ztaxcorp.net

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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