Brief by Shorts91 Newsdesk / 04:31am on 05 Sep 2025,Friday Business
The GST Council plans additional levies on tobacco and related products beyond the new 40% GST rate to protect state revenues after compensation cess ends. Finance Minister Nirmala Sitharaman announced a special 40% GST slab for "sin goods" including pan masala, cigarettes, zarda, and unmanufactured tobacco, effective September 22. Despite higher GST rates, overall tax incidence will remain 52-88%, matching current levels through supplementary duties. The compensation cess, originally implemented in 2017 for five years and extended until March 2026 due to pandemic-related state revenue losses, will be phased out gradually. Current 28% GST plus cess structure continues until November-December while compensation liabilities are fulfilled, preventing potential state revenue shortfalls. (PC: Health hub)
