The Goods and Services Tax (GST) Council's recent decision to impose a 40% tax on sugary drinks while maintaining a 5% rate on mithai (Indian sweets) has sparked debate about the fairness and logic of India's tax policy. This move, part of the broader "GST 2.0" reforms, aims to simplify the tax structure and address public health concerns, but the differential treatment of these sweet items raises questions about cultural biases and the effectiveness of using taxation to promote healthier consumption.

Under the new GST framework, effective from September 22, 2025, sugary drinks like colas, flavored sodas, iced teas, and energy drinks are now classified as "sin" goods, alongside tobacco and alcohol. This puts them in the highest tax bracket of 40%, a significant increase from the previous 28%. The government's intention is to discourage the consumption of these beverages, which are linked to rising rates of diabetes and obesity in India.

In contrast, mithai, a staple in Indian culture and cuisine, continues to be taxed at a concessional rate of 5%. This rate is even lower than the previous GST rate of 12% or 18% on many sweets. This decision has been met with criticism, with many arguing that it reflects a cultural blind spot or a politically motivated move to avoid alienating voters.

Health experts point out that mithai can be just as, if not more, harmful than sugary drinks. A single gulab jamun, for example, contains a significant amount of sugar, often exceeding the daily recommended limit. The high sugar content in these sweets contributes to the same health problems associated with sugary drinks, such as weight gain, insulin resistance, and an increased risk of chronic diseases.

The government's decision to tax sugary drinks at a higher rate is based on the understanding that these beverages contribute to excessive sugar intake and related health issues. By making these drinks more expensive, the government hopes to reduce their consumption and encourage healthier choices. However, critics argue that this approach is inconsistent and ineffective if traditional sweets, which also contain high levels of sugar, are not subject to similar taxation.

Some experts suggest a more uniform approach to sugar taxation, applying the "sin" tax to all products with high sugar content, regardless of their origin or cultural significance. They also recommend measures such as front-of-pack sugar warnings, limits on exemptions based on cultural sentiment, incentives for reformulated sweets with lower sugar content, and national awareness campaigns about the dangers of excessive sugar consumption.

The GST Council's move to revise GST rates is part of a broader effort to simplify the tax system, boost domestic spending, and promote economic growth. The new structure aims to reduce complexity, lower consumer costs on essential items, and create a fairer balance between necessities and luxury goods. While the increased tax on sugary drinks aligns with public health goals, the lower rate on mithai raises questions about the government's commitment to tackling the root causes of unhealthy diets and related health problems.