Representative image of alcohol bottles.
Credit: iStock Photo
Finance Minister Nirmala Sitharaman is set to unveil the much-anticipated Interim Budget on February 1.
The focus is on whether significant announcements will be made in this election year, with just a couple of months remaining before the Lok Sabha polls.
As we approach the Interim Budget in the next few days, let's delve into the concept of Sin Tax.
Sin Tax is a substantial levy imposed products such as tobacco, alcoholic beverages, gambling, etc., aiming to discourage their consumption among the public.
India has consistently been one of the countries imposing hefty taxes on items like cigarettes, liquor, and pan masala substances.
These taxes serve a dual purpose: First, by increasing the market price, they dissuade people from consuming what is perceived as undesirable.
Second, the companies manufacturing these products bear a significant tax burden.
In essence, a Sin Tax is perceived as a beneficial strategy from the government's perspective.