Sin-Goods Stocks Slump as Centre to put a ‘Sin Tax’ of 40% GST On Goods
On 15th August, PM Modi announced a Diwali gift and hinted towards reducing GST on goods and simplifying the GST slabs into just two categories. Following this, the Finance Ministry released key points on the blueprint of the new GST Reform 2025.
While everyone took a breath of relief, one sector that went into the red was the tobacco and alcohol sector. According to reports, the government is planning to pull a 40% GST on all sin goods, which spooked the tobacco industry investors, clearly visible from the market stats on Monday.
Today, on the first day of the trading week, where all other sectors are celebrating the GST reform and gaining investor confidence, tobacco and online gaming stocks slipped on Monday, August 18, following media reports that the government may impose a 40% GST rate on “sin goods,” including these sectors.
Sin Tax And Sin Goods Under GST Reform 2025
Under the proposed GST reform, India’s taxing system will move from its current multi-slab GST structure to just two broad rates: 5% and 18%.
However, certain demerit goods, such as tobacco products and online gaming services, would still attract the highest possible levy of a hefty 40%, ensuring continued revenue from these high-margin categories. On moral grounds, the government emphasizes that this tax is not primarily to generate revenue, but to discourage the consumption of products that are not good for public health. In India, gambling is also treated as a sin good, as it poses serious financial risks to those involved.
For investors, this signals a tougher environment ahead for sin-good sectors. Higher taxation can compress profit margins, weigh on demand, and swing market sentiment, especially when the change appears to be long-lasting. If you’re tracking these stocks, now might be a good time to review your exposure and strategy.
Sin Goods Shares Slide: Tobacco, Gaming Stocks Dip on 40% GST Fear
Today At 9:30, after the stock market opend and zoomed in green, the key tobacco and the online gaming stock slide into red following the reports about Sin Tax on the goods.
Major Comoanies from these industry fell into pit.
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ITC, Godfrey Phillips, and VST Industries shares dipped between 0.5% to 1%.
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Nazara Technologies Ltd and Delta Corp Ltd sank by around 2%.
The market reaction reflects investor concerns over potential margin pressures and long-term impact on demand in these sectors. As other industries rallied on GST reform news, sin goods were clearly out of favour in Monday’s early trading session.
Right now cigarettes top the list of heavily taxed products, 48 to 55% on MRP.
Aishwarya is a journalism graduate with over three years of experience thriving in the buzzing corporate media world. She’s got a knack for decoding business news, tracking the twists and turns of the stock market, covering the masala of the entertainment world, and sometimes her stories come with just the right sprinkle of political commentary. She has worked with several organizations, interned at ZEE and gained professional skills at TV9 and News24, And now is learning and writing at NewsX, she’s no stranger to the newsroom hustle. Her storytelling style is fast-paced, creative, and perfectly tailored to connect with both the platform and its audience. Moto: Approaching every story from the reader’s point of view, backing up her insights with solid facts.
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