By Admin 
GST 2.0: After the announcement of GST 2.0, the government has increased the tax on harmful goods like cigarette, paan masala and tobacco products to 40 percent on the one hand, while there is no effect on alcohol. This decision clearly shows that despite the long -standing negotiations between the Central and the State Governments, the right to tax the liquor will remain with the states.
Rates will increase on harmful things
The government has increased the tax on the products such as cigarettes, gutkha and other tobacco products from 28 percent to 40 percent. That is, an additional burden of 12 percent has been put on these items directly. Its purpose is to reduce the consumption of these harmful things among the people on the one hand, on the other hand the government is also considering it as a big source of revenue.
The FAQ issued by the Press Information Bureau (PIB) states that this special rate will apply only to some goods like harmful and luxury items. In fact, till now these items were also applied with 28 percent GST, but after merging the cess into GST, they have been kept under a special rate.
Big means of earning alcohol for states
At the same time, alcohol is completely excluded from the purview of GST 2.0. Earnings from alcohol for states are a large part of their total tax revenue, which reaches 15 to 25 percent in many states. This is the reason that if liquor was included in GST, then the income of the state governments would have a direct impact. Tax experts believe that the revenue from alcohol is very important for the development work and other expenses of the states.
Therefore, despite the implementation of GST 2.0, liquor rates will remain under the control of the states and the state governments will continue to fix tax on it. This simply means that while tobacco and related products will be expensive, alcohol will not be affected at the moment.
Also read: What do the big business personalities of the country think on GST 2.0? Opinion from Anand Mahindra to Harsh Goenka