35% GST slab ill-conceived, will destroy livelihoods: RSS think tank

Swadeshi Jagaran Manch (SJM), the economic arm of the Rashtriya Swayamsevak Sangh (RSS) has dubbed as “ill-conceived” and “a bad idea” the recommendation to introduce a new GST slab of 35 per cent on so-called demerit goods such as tobacco products, especially cigarettes and aerated beverages. The proposal, if accepted, by the GST Council, would “defeat the very efficiency principle of taxation, the SJM said.

“Having 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 per cent slab be abolished. If we add yet another higher slab, it would make GST even more complex and inefficient. This may or may not help increase revenue, but will definitely make it inefficient. The proposal of introducing a new extra tax slab of 35% on so-called sin goods is ill-conceived,” Ashwani Mahajan, national co-convenor of SJM said. Mahajan reiterated the fight against tobacco, but added the issue was “not that simple”, pointing towards the expanding menace of China-led black market owing to excessive taxation.

“Irrationally high taxes on cigarettes have led to a huge black market, which is only going to expand. China is the biggest beneficiary of this black market,” he said.