What is Sin Tax

A sin tax is imposed on goods and services, which are perceived as harmful to society. Examples of products on which sin tax is imposed are: tobacco, gambling ventures, alcohol, cigarettes, etc.

 

What is the main purpose of sin tax?

 

Sin taxes seek to prevent people from participating in socially harmful activities. The aim is to reduce or eliminate the consumption of harmful products by making them more expensive to obtain. They also provide a source of revenue for governments. In March 2019, a committee headed by Arvind Subramanian recommended that in a unified GST regime, certain goods should attract a ‘Sin’