RSS-linked SJM opposes proposal of 35% GST on 'sin goods', calls it a ‘bad idea’: Here’s why

Swadeshi Jagran Manch (SJM), the economic arm of the Rashtriya Swayamsevak Sangh (RSS), doesn’t seem particularly enthused about the proposal to introduce 35% GST on "sin goods" and has dubbed it as a “bad idea”. Amid concerns over the proposed restructuring of GST tax slabs for "sin goods" like aerated beverages and tobacco products, SJM national co-convenor Ashwani Mahajan said such a move would lead to smuggling and loss of revenue for the country.

"Another slab in GST, in the name of luxury and sin goods is primarily a bad idea, which will defeat the very efficiency principle of taxation. Already, a need is being felt among economists that the present number of slabs should be reduced, and the highest 28% slab be abolished," PTI quoted Mahajan as saying.

The SJM functionary argued that the fight against tobacco required a multi-pronged approach, pointing out that high taxes on cigarettes have led to a huge black market.

"China is the biggest beneficiary of this black market of smuggled cigarettes, which are way more harmful than legal cigarettes," he said.

Mahajan also raised concerns over the possibility of people switching to lower and more harmful grades of tobacco if legal cigarettes or 'bidis' become unaffordable.

The recommendation has also drawn objections from trade bodies such as the All India Consumer Products Distributors Federation (AICPDF) and Indian Sellers Collective, who fear the move could harm small retailers and disrupt the market.

“We call upon the government to prioritize their welfare by simplifying GST compliance, reducing rates thoughtfully, and ensuring a stable, equitable business environment," AICPDF national president Dhairyashil Patil said.

Indian Sellers Collective said the creation of a new slab of 35% would be counterproductive.

"All the gains of the GST regime will be wiped out, with permanent damage to the vast age-old retailer network of India if the GoM's recommendations are adopted by the upcoming GST Council meeting," Abhay Raj Mishra, Member and National Coordinator, Indian Sellers Collective, said.

The 55th GST Council meeting, scheduled for December 21 in Jaisalmer, Rajasthan, is expected to deliberate on this proposal, alongside other issues such as GST exemption on insurance, including health insurance.