{"id":11030,"date":"2025-09-07T20:52:56","date_gmt":"2025-09-07T20:52:56","guid":{"rendered":"https:\/\/tezgyan.com\/index.php\/2025\/09\/07\/gst-on-sin-goods-tobacco-pan-masala-to-face-additional-duties-over-40-gst-after-compensation-ends-report-business-news\/"},"modified":"2025-09-07T20:52:56","modified_gmt":"2025-09-07T20:52:56","slug":"gst-on-sin-goods-tobacco-pan-masala-to-face-additional-duties-over-40-gst-after-compensation-ends-report-business-news","status":"publish","type":"post","link":"https:\/\/tezgyan.com\/index.php\/2025\/09\/07\/gst-on-sin-goods-tobacco-pan-masala-to-face-additional-duties-over-40-gst-after-compensation-ends-report-business-news\/","title":{"rendered":"GST On Sin Goods: Tobacco, Pan Masala To Face Additional Duties Over 40% GST After Compensation Ends: Report | Business News"},"content":{"rendered":"


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The GST Council led by Nirmala Sitharaman announces a 40 percent GST slab for sin goods like Pan Masala and zarda.<\/h2>\n
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New GST rates having two slabs of 5% and 18% and a special slab of 40% for sin goods will come into effect from September 22. <\/p>\n<\/figure>\n

GST On Sin Goods:<\/strong> The government is planning to impose additional levies on tobacco and related products over and above the 40% GST to offset potential revenue losses for states, according to a <\/span>Moneycontrol<\/span> report. The report added that the overall tax incidence on these products is expected to remain in the 52<\/span>\u201388% range, in line with the current levels.<\/span><\/p>\n

The MC report added that the Union Finance Minister may then decide the actual date of transition to the revised rates of GST approved by the Council for the above-mentioned goods.<\/span><\/p>\n

The 56th GST Council announced to remove compensation <\/span>cess<\/span> on sin goods in a phased manner until the remaining liability of the back-to-back loans taken by states for revenue losses is met. <\/span><\/p>\n

The GST Council, led by Finance Minister, Nirmala Sitharaman, has created a special tax slab for sin goods like Pan Masala, cigarettes, chewing tobacco products like <\/span>zarda<\/span>, and unmanufactured tobacco and bidi. These goods will attract 40 per cent GST (Goods and Services Tax), higher than other products. <\/span><\/p>\n

At present, tobacco and related products have attracted a 28 per cent GST along with <\/span>cess<\/span>, taking the effective tax incidence in the range between 52 to 88 per cent. <\/span><\/p>\n

The fear grows that the new tab structure on tobacco and related products will lead to a fall in states\u2019 revenue, once the compensation <\/span>cess<\/span> ends. As of now, the GST Council has kept the current GST rate structure of 28% GST along with <\/span>cess<\/span> for tobacco and related products. It will continue till November-December, until the compensation <\/span>cess<\/span> liabilities are fulfilled. <\/span><\/p>\n

When the GST act was implemented in 2017, the government added a compensation <\/span>cess<\/span> provision with these products for five years to safeguard the states\u2019 revenue being hit by the new indirect tax system. Later, the compensation <\/span>cess<\/span> was extended until March 2026 to compensate service loans these states raised during the pandemic years when revenues sharply fell. <\/span><\/p>\n

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Business Desk<\/a><\/p>\n

A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More<\/span><\/p>\n<\/div>\n<\/div>\n

A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More<\/span><\/p>\n<\/div>\n<\/div>\n

First Published:<\/span><\/p>\n
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September 05, 2025, 08:29 IST<\/p>\n<\/div>\n<\/div>\n

News<\/a> business<\/a> GST On Sin Goods: Tobacco, Pan Masala To Face Additional Duties Over 40% GST After Compensation Ends: Report<\/span><\/div>\n
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Last Updated:September 05, 2025, 09:36 IST The GST Council led by Nirmala Sitharaman announces a 40 percent GST slab for sin goods like Pan Masala and zarda. New GST rates having two slabs of 5% and 18% and a special slab of 40% for sin goods will come into effect from September 22. GST On…<\/p>\n","protected":false},"author":1,"featured_media":10205,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[],"class_list":["post-11030","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/posts\/11030","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/comments?post=11030"}],"version-history":[{"count":0,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/posts\/11030\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/media\/10205"}],"wp:attachment":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/media?parent=11030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/categories?post=11030"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/tags?post=11030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}