Your 'hobby' gives the government an extra 'earning' of Rs 70000 crore, and your savings are also wasted

GST Cess on Luxury Items: 'Hobby is a big thing…' Now the government also seems to be saying the same. The reason is also clear. Your hobby is to increase the revenue in the government treasury. The government has earned Rs. 70,000 crore through sin tax. In the language of economics, the extra tax that the government is earning on your 'hobby' is called sin tax.

Sin tax is usually imposed on pan masala, alcohol, cigarettes, carbonated drinks, soft drinks, expensive perfumes, imported goods and vehicles. It is a kind of tax on 'luxury'. The government imposes luxury tax on these items.

GST levied as cess

When the GST system was implemented in July 2017, the highest tax slab was kept at 28 percent. But a separate cess of up to 15 percent was levied for sint tax or 'luxury goods'. The purpose of imposing this cess is to compensate the revenue deficit of the states from the revenue received from these goods.

Sin tax revenue is the golden goose for the government

Now this sin tax has become a 'golden egg' laying hen for the government. The government is getting so much money in this head that even after meeting all the expenses and repaying the loans to the states, the government will still have an extra Rs 70,000 crore. During the COVID-19 crisis, the central government took loans on behalf of the states. The repayment deadline for most of these loans is March 2026. A senior government official, on condition of anonymity, said that according to the trend of GST cess collection, even if the government repays all the loans before time, the government will still owe Rs 65,000 crore to Rs 70,000 crore. crore.

The government's budget figures also testify to this claim. In the financial year 2020-21, the government's GST cess collection was Rs. 85,191.9 crores. Then in 2021-22 it will be Rs. 1,05,000 crores, in 2022-23 it will be Rs. 1,25,862.40 crores and in 2023-24 it will be Rs. 1,45,000 crores. While in the financial year 2024-25 it is estimated to be Rs. 1,50,000 crores.

Cess discussed in GST Council meeting

The cess system will be discussed in the GST Council meeting today with Finance Minister Nirmala Sitharaman. This system was implemented for a fixed period only. This period of GST cess is ending in March 2026. In such a situation, in the 53rd meeting of the GST Council on Saturday, there may be a discussion on what should be done regarding GST cess in future.