The GST Council’s 56th meeting has paved the way for a simplified tax regime with just two main slabs–5 per cent and 18 per cent– and a special 40 per cent rate exclusively reserved for “sin goods” and ultra-luxury items.
Effective September 22, this marks a major overhaul after the removal of the Compensation Cess, with overall tax incidence preserved under the consolidated GST framework. But the reforms have thrown up a curious twist: bidis have not been placed in the 40 per cent bracket, ‘tendu’ too finds itself slotted at just 5 per cent.
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What falls under 40% ‘sin goods’ slab?
The top bracket applies to products considered harmful to health or society, ranging from alcohol, tobacco, pan masala, and gutka to aerated sugary drinks, caffeinated beverages, large SUVs, racing cars, yachts, private aircraft, casinos, betting, and lotteries.
Effectively, these were earlier taxed at 28 per cent plus cess, making the burden close to 40 per cent. Now, the Council has consolidated them into a single 40 per cent slab.
But bidis aren’t in the 40% bracket
Here’s where the new GST structure raises eyebrows. While cigarettes and pan masala are taxed at 40 per cent, bidis are kept out of the highest slab. Instead, the rates now stand at:
Bidis: reduced from 28 per cent to 18 per cent
Bidi wrapper leaves (tendu): down from 18 per cent to 5 per cent
The probable reason behind this exemption is seen as an attempt to safeguard the domestic bidi industry, which employs over 70 lakh workers across rural India.
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Netizens’ take: From premium bidis to Gen-Z woes
The tax relief for bidis while slapping luxury goods and cigarettes with 40 per cent GST sparked a meme fest online.
One user wrote: “GST on Bidis reduced from 28 per cent to 18 per cent. ITC to roll out branded bidis soon. Next up: Premium bidis in gold foil, paired with artisanal chai.”
Another commented: “They reduced GST on bidis while increasing it on cigars & cigarettes. The rich won’t stop buying cigars, the poor will smoke more bidis. What’s the logic?”
One user took a jab at Gen Z, captioning: ‘People saying 4 slabs of GST reduced to 2 slabs. Meanwhile, Gen Z after realising that their favorite things–Hell, Sting, and sutta–will be costly’ (poking fun at younger folks affected by higher prices on energy drinks and cigarettes, aka ‘sutta’).
And one witty take summed it up: “Equality in action — everyone gets lung damage, just at different price points.”
