'Congress wants 5% on tobacco?' FM Nirmala Sitharaman hits back at 'Gabbar Singh Tax' remark; netizens react

Union Finance Minister Nirmala Sitharaman hit back at opposition criticism over the government’s latest GST reforms, including raising the maximum tax slab from 28 per cent to 40 per cent. The increase, mainly on sin and luxury goods, had drawn jibes from the Congress, who dubbed it the ‘Gabbar Singh tax.’

She took a direct jab at Congress in response to journalist’s reference to the ‘Gabbar Singh tax' remark while asking for her take on the 40% tax slab introduction. "Is the Congress Party demanding five per cent tax on tobacco and gutkha? Congress Party wants us to give it at 5%. Congress Party considered impossible to implement GST during their time," she said.


Further hailing the GST implementation she added, "We have implemented and are also doing second-generation reforms under the leadership of Modi ji so that people get relief on their day-to-day items. MSMEs and labour-intensive units also get relief, due to which there will be easy compliance. Congress should decide whether it wants to oppose or support on the issues that are in the interest of the people. People will expose you."

Netizens react to 40% slab

Netizens gave mixed reactions to Sitharaman’s announcement of the 40% GST slab. One social media user commented, "Ironically this gutka and tobacco are highly consumed by comman man. I am not supporting 5% slab but these can levied by state governments like on liquor," while another simply replied, "Well said!!"

An X user added, "40% GST on tobacco, cigarette and beer. If you don't consume any of these, it's equivalent to 10% hike in your salary."

"Oof, that's a massive tax hit," said another user.

Many others gave similar reactions either questioning why certain products are not banned while some opposed the hike, saying it shouldn't come under GST ambit and have separate duties like for alcohol.

Also read: What are sin goods and why they are in highest slab? All you need to know

Why the higher tax rate?

The new 40 per cent slab is for items labelled 'sin goods' or luxury products such as tobacco, pan masala, aerated drinks and premium vehicles. The move marks a major restructuring of the indirect tax system, as the government transitions to a simplified regime with two main slabs of 5 per cent and 18 per cent, with this special rate as kind of an exemption.

Experts note that the higher rate ensures stable revenue since demand for these products is largely price inelastic. The reforms also merge the Compensation Cess with GST on these goods, maintaining overall tax incidence, while easing compliance for MSMEs and labour-intensive sectors.