Bengaluru: Recently, the GST council meeting that concluded on October 20, proposed a much lower 26% GST sin rate, which experts stress would have a significant impact on the revenue as well as the health of our nation.
Their contention is that India has the second largest number of tobacco users (275 million or 35% of its adult population) in the world, out of which at least 10 lakh die every year from tobacco-related diseases. Tobacco uses also extracts enormous health and economic costs on the country.
“A much lower GST rate would make all tobacco products more affordable to the youth and other vulnerable populations, thereby leading to higher health care costs and increased loss in productivity. This will certainly lead to an increased number of fatalities per year, which is not good for any country. I firmly believe and urge that the government should tax the tobacco products at a very high rate to ensure it discourages mass consumption,” said Dr U.S. Vishal Rao, oncologist and member of state government’s high power committee for tobacco control.
According to Dr Upendra Bhojani, Assistant Director, Institute of Public Health (IPH), “The current tobacco tax differentiates significantly between various forms of tobacco products (such as bidis, smokeless tobacco, and cigarettes). Continuing to sell cheap, virtually tax-exempt bidis to the underprivileged, even in the new GST system, will ensure that the poor continue to be trapped in vicious cycle of poverty and ill health, exacerbated by affordability and addiction, which causes them to spend more on tobacco and less on food, healthcare and education. We would urge the central and state governments to tax all forms of tobacco, including bidis, at 40% under GST regime, to insulate the population from its ill effects.”
Dr Rao said that based on current scenarios, a 40% sin rate combined with the existing excise tax and top-up state rights to tax tobacco appears to be the best scenario for public health and revenue.
