Citizen Awareness Group urges GST council for 40 percent tax on all forms of tobacco

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NewZNew (Chandigarh) : Citizen Awareness Group- Chandigarh, a voluntary action group, and Consumer VOICE in a joint statement have urged the GST council to levy the highest tax rate of 40 percent under the GST regime on all forms of tobacco including cigarettes, bidis, smokeless tobacco as well as pan masala to discourage their use and addiction, especially amongst the poor and our nation’s youth.

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. Higher taxes are particularly effective in reducing tobacco use among vulnerable populations, such as youth, pregnant women, and low-income smokers. In 2012, despite significant opposition from the tobacco industry, the Philippines passed a landmark tobacco “sin” tax that has helped reduce cigarette sales by 14 percent, while increasing tobacco tax revenues by more than 118 percent.  A comprehensive economic reform like 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.

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Tobacco-use imposes enormous health and economic burden on the country.  Each year, almost 1 million Indians die from tobacco-related diseases in India.  The total direct and indirect cost of diseases attributable to tobacco use was a staggering Rupees 1.04 lakh crore ($17 billion) in 2011 or 1.16% of GDP. Tobacco-attributable direct medical costs alone are around 21% of national health expenditure.  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).

Surinder Verma, Chairman of Citizen Awareness Group said, 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. Higher taxes are particularly effective in reducing tobacco use among vulnerable populations, such as youth, pregnant women, and low-income smokers.

According to, Ashim Sanyal, COO, Consumer VOICE, “The GST regime should discourage consumption of that hazardous substances like Cigarettes, Bidis, Pan Masala, Khaini and Zarda through higher taxes. He adds, “Bidis should be taxed at the same level as all other tobacco products under GST, since lower GST rates on bidis will promote its use amongst our most vulnerable populations and keep them below the poverty line.”

Citizen Awareness Group and Consumer VOICE emphasized how critical it is to effectively regulate and tax all forms of tobacco uniformly under GST regime to protect India’s most vulnerable populations – the time has come for the government to step up to protect India’s 67.5 million bidi smokers from an untimely and painful death.A healthy and productive citizen will contribute more to nation building and help in realizing India’s dream of becoming a world economic power.