Before we start with the facts about Sin Tax, let us ask you a question. Are you sinning? Aren't you sure? Fine, let us then ask you a few more questions. Do you smoke, consume alcohols, eat tobacco or paan masala, take drugs, etc.? If yes, then you are unquestionably sinning. You might be thinking how these could be sins. And the answer is because such products affect human health and aren't safe to consume.

To your surprise, the Government of India has imposed the highest tax on sinning products because of certain reasons described later in this blog.

Therefore, in this blog, we aim to make you aware of the various aspects of Sin Tax in India. Here, we have discussed five facts that we are sure a very few of us know. So, let's get started without making any more delays-

What is meant by Sin Tax?

Sin tax is an excise or sales tax levied on the purchase of certain goods that are harmful to society and individuals. For instance, items such as drugs, cigarettes, alcohol and tobacco, soft drinks, fast foods, beverages, pornography, and gambling are injurious to health as well as for society.

Sin Tax is also applicable to luxury cars since they contribute to emitting pollution in excess. Everything that damages the environment and affects the people and society whether directly or indirectly comes in the category of sin.

5 Unknown facts about Sin Tax in India

Until now, we have understood what Sin Tax is and why the government has imposed this tax. But there are a few things that we aren't still aware of, and that's what we will learn in this blog. So, let's have a look below at some surprising facts on Sin Tax-

• The Government has imposed the highest tax rates on Sin goods

Yes, it's true. Currently, in India, the GST council has proposed a 4-tier rate structure with two standard rates 12% and 18%, a lower rate of 5% for the essentials and a higher rate of 28% for sin items and luxury goods.

• The reason for the highest tax is to lower the consumption of sin items

Well, it could be somewhat shocking to all, but yes that's the reason. In fact, there are two main reasons why the government of India has imposed the highest tax rates on sinning items. They are as follows:

• To discourage the consumption of undesirable goods;
• To force industries producing these goods to pay higher taxes so that they can be used to fund other welfare expenditure.
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• Panels suggest higher sin tax of 40% on tobacco and alcohol

Based on the article published in Times of India, the Niti Aayog has proposed and suggested a higher Sin tax of 40% on the items such as tobacco, alcohol, and unhealthy foods such as sugar-sweetened beverages and soda, etc.

Such items contribute to air pollution, malnutrition, and dietary risks which are the biggest contributors to disease burden in India.  The reason behind the tough measure is to upgrade the country's public and preventive health system.

• WHO recommends countries to impose at least 75% or more on Sinning goods

WHO, known as the World Health Organization, prescribes countries to impose the tax of at least 75% or more of the retail price to achieve the dual objective of reducing the use or consumption of tobacco and alcohol and for increasing government revenue?

• Sin Tax in India is very low as compared to other countries 

Despite imposing the highest tax on sinning items, India is still known to have imposed the lowest tax rates on tobacco and alcohols as compared to other middle-income countries, including those in South Asia.

Conclusion

Whatever tax percentage has been imposed on sinning items, it's clear that the prime purpose of imposing Sin Tax is to achieve the dual objective of lessening the use of tobacco and increasing the government revenue to be used for other welfare associations. If you are still in doubts, for GST Registration then contact Enterslice. Our team of experts will help you with your queries.

What Is GST Registration?

GST registration is an official regime in which the businesses whose turnover for the business is more than INR 2,000,000 (20 Lakhs) has to register themselves as normal taxable corporate entity. If the organization is not registered under GST regime it will be treated as an offence under the corporate laws and the business will be penalised heavily for it. The normal time period for a business to register itself under GST Regime is between 2-6 Working Days.

Businesses Which Should Register for GST:

• Corporates and individuals who were registered under the pre GST laws like excise, VAT and Service Tax etc.
• The businesses whose turnover exceeds the limit of INR 20 Lakhs.
• Agents of a supplier and Input Service Distributor.
• All the e- commerce aggregators.
• The people who supply through e commerce aggregator.
• People who are supplying the information of any kind of data from a place outside to someone in India, and that person is not a registered taxable person.

Documents Required for GST Registration:

• The first and prime most important is the PAN of the Applicant without which no online GST registration can be done.
• Then you need to show the Aadhaar card for the applicant.
• The personal identity proofs of all the directors of the corporate entity to be registered.
• The proof for address verification for the business location.
• The bank account statements and also a copy of cancelled cheque is mandatory to have.
• It is also required to produce the Digital Signature of the directors and applicants.

Penalty for not registering under GST Regime:

In case any business does not register itself for GST Regime, the business will have to pay heavily for the penalty in this case.  The amount of penalty is 10% of the tax amount which has not been duly paid and the minimum subjected amount for this penalty is INR 10,000. If the business is found to do this mistake voluntarily the amount of penalty can be even 100% of the taxation not paid duly.

Process of GST Registration:

The entire GST Registration procedure is divided here into following basic 11 steps for the better understanding to a common man and they are as follows:

• You first need to visit the GST portal and click Register on it.
• Then the second step requires you to fill the details like type of taxpayer, state and district of your location of business, name of the business along with the PAN of the business for which you want to register for GST. The email ID and mobile numbers for further communications and OTPs. Then click on Proceed.
• You will now be asked to enter the OTP sent on that number you mentioned in the previous detail. Enter and Continue.
• You will now get a Temporary Reference Number (TRN). Note it for further use.
• Then you are required to again Go the GST portal and Click Register Now.
• Choose TRN. Now enter the TRN provided to you over the mail and proceed it further.
• Again you will get an OTP and you need to enter it and proceed even firther.
• The status of the application will be shown as Drafts. Click on Edit option.
• Then you need to fill all the details and submit relevant documents.
• Then you need to verify the information submitted, go to the verification page and tick on declare and submit the application.
• You will now get a message for successful registration and also the Application Reference Number.

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After implementation of GST, the government has also focused on setting norms for requirement of generation of E way bills for movement of goods from one place to another.

What is an E way Bill?

Electronic way bill is an electronically generated unique document. This document is for specific consignments of goods from one place to another. Such movement can either be inside state boundaries or inter-state in nature.

In earlier VAT regime, Way Bill a physical form was used for the same purpose. After introduction of GST registration procedure, with replacement of VAT and other taxes, Way Bill is also replaced by Electronic way Bill.

When anyone generates an E way bill a unique EBN (E-way Bill Number) is allotted. This EBN is mentioned in the E way bill which is available to supplier, recipient of goods along with the transporter.

When to Generate E way Bill?

Every time for movement of goods E way bill is required to be generated if the value of consignment exceeds Rs. 50,000/-. Such movement can be of any type, including supply in the form of sales (with or without consideration), transfer between branches, exchange etc.

However, there are certain cases when the requirement of E way bill is mandatory irrespective of the value of the consignment. Such cases include the following:

• In case of any transport of handicraft goods exempted under GST regime.
• For movement of goods by Principal to Job worker ad back by registered Job Worker.

E way bill is required to be generated before initiating the movement of goods in question.

Who Generates E- way Bill?

E way bill can be generated by following people in different circumstances:

• Person Registered under GST regime
• When such a consignment is either made by or to a GST registered person, then such registered person is required to generate E way Bill for the movement of goods.
• Person Not Registered under GST regime ax
• The liability to generate E way bill does not only lie with GST registration person. If any unregistered person is initiating the supply then they will be liable to generate E way bill. However, if such supply was made by an unregistered person to the registered person, then the recipient is expected to comply with e way bill generation requirement.
• Transporter of Goods
• If the supplier and the recipient of the goods do not generate the E way Bill, then in such a case the transporter is required to generate the E way Bill.

How to Generate E-way Portal?

Now that we have clarified as to what is an e way bill. Now, the question is how to generate an E-way Bill. An e-way bill can be generated either by visiting the official portal or it can be done through SMS on phone. This SMS facility was introduced later on for ease of doing business.

In order to generate an E-way Bill, the person is required to first create a login ID on the Official portal of E-way Bill.

For how long is E-way Bill valid?

Vide Notification No.12/2018 the authorities have replaced the rules relating to E way Bill. However, there have been no major changes; one of the main changes introduced is the validity of E-way Bill.  Current rules state the following:

• Any E-way Bill issued for any distance less than or equal to 100 K.M will be valid for one day. For every additional 100 K.M. of part there of the validity will increase by additional 24 hours.
• In case of Over dimensional cargo for distance upto 20 K.M. the validity is one day. And for every additional 20 K.M. or part there of the validity will extend by additional 24 hours.

Note: Here “Over Dimensional Cargo” shall mean a cargo carried as a single indivisible unit and which exceeds the dimensional limits prescribed in rule 93 of the Central Motor Vehicle Rules, 1989, made under the Motor Vehicles Act, 1988 (59 of 1988)

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