99% of goods under GST either in zero, 5% or 18%; only 1% taxed as sin goods: FM Sitharaman

Asked if petroleum products and alcohol will continue to remain outside the GST, Sitharaman said, “The current proposal does not include it and it is unlikely to be done in the immediate future.

At the 56th meeting of the GST Council, chaired by the finance minister, a 40 percent GST tax slab has been announced for a few items like high-end cars, tobacco and cigarettes – that are often referred to as “sin goods” or “demerit goods”.

The decision was taken in the meeting on Wednesday to cut down the negative social or health impact from the use of these products in the country.

As far as GST is concerned, ‘sin goods’ pertain to Sports Utility Vehicles (SUVs), tobacco, carbonated drinks, online gambling and gaming, luxury or harmful items that are subject to the highest tax plus cess.

Sin goods under GST include tobacco, pan masala, gutkha, cigarettes, luxury cars, online gambling or gaming, caffeinated beverages, coal, lignite, peat, and aerated drinks.

These tax slabs on these products has been raised from 28 to 40 percent, she said

Speaking about the debate on GST applicable on popcorn in the interview to CNBC-TV18, Sitharaman noted that it caused "lots of litigation" as "people chose to go for the the higher sugary ones", adding that such classifications were "causing problem".

She further said that the new GST slabs are aimed at cleansing the system from anomalies, doubts, duplications and any interpretative issues.

The goods and services tax rates applicable on popcorn had become a major point of discussion last year when the GST Council had introduced different levies for multiple varieties of popcorns.

However, that debate is likely to come to an end with the new rate structure approved on September 3 by the Council, which comes into effect on September 22.

Under the new GST regime, popcorn mixed with salt and spice will attract 5 percent GST regardless of whether it is sold loose or pre-packed and labelled. Caramel popcorn will also be taxed at 5 percent as rates for sugar confectioneries have been slashed to 5 percent.

The older rate structure had come under criticism for the 5 percent rate on spiced/salted popcorn sold loose and 12 percent if the same product was sold pre-packaged and labelled. Caramel popcorn was charged at a rate of 18 percent.