Demerit Goods
- A 35% GST rate is proposed for demerit goods, such as aerated beverages, cigarettes, and tobacco products, marking the first major tax restructuring in the seven years of GST implementation.
- These goods or services are considered harmful to consumers and society due to their negative effects, such as addiction or health issues, and the external costs they impose on third parties.
- Alcohol, cigarettes, gambling, and fast food are typical examples of demerit goods, often linked to societal and individual harm when consumed excessively.
- Demerit goods are taxed heavily to discourage consumption, address negative externalities, and offset societal ....
