Almost one million people die from tobacco-related diseases in India.

GST Council urged to slap 40 sin tax on tobacco productsPTI
news Tobacco Sunday, October 16, 2016 - 16:36

Consumer Voice, a voluntary action group, on Sunday urged the GST Council to levy the highest, "sin tax" of 40 % on all forms of tobacco products, including cigarettes, beedis and smokeless tobacco.

According to Consumer Voice, the step will help in discouraging the use of tobacco and its addiction, especially among the poor and the nation's youth.

The group said that a comprehensive economic reform like Goods and Services Tax (GST) offers the government a unique opportunity to tax tobacco uniformly at the highest GST rate of 40 % and save millions of Indians from dying prematurely of tobacco related diseases.

"It has been proven globally that the most direct and effective method for reducing tobacco consumption is to increase the price of tobacco products through tax increases," Consumer Voice said in a statement.

"Higher taxes are particularly effective in reducing tobacco use among vulnerable populations, such as youth, pregnant women, and low-income smokers," read the statement.

The group said that each year almost one million people die from tobacco-related diseases in India. Tobacco also causes 2-3 lakh new cases of oral and neck cancer every year in India, which has the world's sixth global burden of the disease. 

"The total direct and indirect cost of diseases attributable to tobacco use was a staggering Rs 1.04 lakh crore ($17 billion) in 2011 or 1.16 % of the GDP. Tobacco-attributable direct medical costs alone are around 21 % of national health expenditure," the statement said. 

"Indeed the costs of tobacco are far greater than what the Indian government/states gain in tobacco excise revenue (just 17 % of total health cost)," the group added.

"The GST regime should discourage consumption of that hazardous substances like cigarettes, beedis, pan masala, khaini and zarda through higher taxes. Beedis should be taxed at the same level as all other tobacco products under GST, since lower GST rates on beedis will promote its use amongst our most vulnerable populations and keep them below the poverty line," said the statement quoting Ashim Sanyal, Chief Operating Officier, Consumer Voice. 

While noting that the industry was opposing the recommendations to impose the "sin tax" rate of 40 % on tobacco, Consumer Voice said that tobacco taxation in India was way below global standards.

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