City Sunday

GST is soft on tobacco products

In the past budgets, excise duty rates were being revised on cigarettes and other tobacco products, but locally manufactured beedi was exempted.  Government of Karnataka in the past regime levied 5% vat on beedi and within a matter of few days withdrew the same.  Anti-Tobacco Activists feel that GST could have made up for the loss due to non-levy of increased excise duty in the Budget and continues handling tobacco industry and its products with kid gloves. GST has retained the highest tax of 28% with a nominal increase of  just 5% cess; this increase is nothing compared with nearly 90% taxes levied in many other countries who are also signatories to the WHO sponsored FCTC protocol. Tobacco industry has various inbuilt causations to absorb this increase.  

      World Health Organisation (WHO) reports say that India has the world’s largest number of oral cancer patients, the second largest tobacco user with more than 275 million people of its population  85% of which are beedi smokers who belong to economically weaker section and India is also the third largest supplier of raw tobacco. Everyday 5500 young people are being initiated into smoking of cigarettes / bidis, 67.5 million unnatural bidi deaths are occurring.  It is also proved that smoking habit escalates TB and caner and pushes youngsters into drug addiction and consequent psychopathic imbalances in a user.

        Non-levy of any notable taxation on beedis will only result in increase in the number of beedi users by shifting from cigarettes due to cost factors (one cigarette pack with sticks of 75 cm in length is being sold over the counter for Rs.150/- per pack and one bundle of bidi is sold at Rs.18/20.  A study has revealed that in a span of 60 years, a smoker burns up One crore of rupees. WHO has said that the tax burden on these products should represent at least 75 per cent of the retail price to make it costlier and uneconomical for a smoker to continue this habit. 

      If India’s integrity has to be kept up, it must make honest and sincere effort for fulfilling its protocol obligation under WHO sponsored Framework Convention on Tobacco Control.   If the much publicized National Tobacco Control Project under the Prime Minister is to succeed, activists insist that tobacco must be brought under a special bracket of demerit goods under GST and taxes levied to the extent of at least 75% as recommended by the World Health Organisation and to dissuade smokers. 

-Vasanthkumar Mysoremath

 (Cancer Patients Aid Association & Anti-Tobacco Forum)

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