Increased tax on tobacco products: PHG

DAINIK NATION BUREAU

Ahead of a crucial Goods and Service Tax (GST) Council meeting scheduled on Feb 18, several leading public health groups have intensified their bid to increase tax burden on all tobacco products.

These groups have appealed the Union Finance Minister Arun Jaitley that all tobacco products especially bidis, are placed in the demerit good category at the 28 percent GST rate with an additional levy of the highest possible rate of cess. These groups have also strongly recommended that tobacco products including bidis should be taxed at uniformly high rates under the new indirect tax framework expected to commence from July 1.

The move of these groups is significant as it comes just ahead of the GST council meet which is expected to discuss the rate slabs for different goods and services under the GST mechanism.

These organizations claim that with the total tax burden currently at 53 percent, 19.5 percent and 56 percent respectively for cigarettes, bidis and smokeless, tobacco, taxation in India is much lower than the level recommended by the World Health Organization (WHO), according to which the tax burden should represent at least 75 percent of the retail price.

These groups believe that increase in tax burden would dissuade the consumption of Tobacco which accounts for 10 lakh triggered deaths every year in India.

They believe that the government’s taxation policies in the tobacco sector have left public health concerns unaddressed.