fbpx
May 26, 2021

Increase cess on tobacco products to aid vaccination: CLPF

Guwahati: Consumers’ Legal Protection Forum, Assam urging the GST Council to increase compensation cess on all tobacco products to generate additional revenue for the government. Forum urges GST Council to consider it an extraordinary measure. This tax revenue from tobacco could significantly contribute to the increased need for resources during the pandemic including vaccinations and augmenting the health infrastructure to prepare for a possible third wave. According to Forum, increasing tobacco taxes in these challenging times will be a WIN-WIN policy as it can address the economic shock from the COVID-19 pandemic and directly reduce COVID 19 related co-morbidities.

Consumers’ Legal Protection Forum, Assam today submitted a letter to Ajanta Neog, Finance Minister, Assam along with the Samir Kr. Sinha, Principal Secretary, Finance; Rakesh Agarwala, Commissioner of Taxes, Assam and urge them to raise the issue of compensation cess on tobacco products in GST Council meeting which will be on 28 May.

Advocate Ajoy Hazarika, Secretary, Consumers’ Legal Protection Forum, Assam said “increasing the existing compensation cess on cigarettes and smokeless tobacco products and levying compensation cess on bidis can be a very effective policy measure to address the immediate need to raise revenue by the central government to compensate state governments for their respective GST revenue shortfalls during the pandemic time. It will be a winning proposition for generating revenue and reducing tobacco use and related diseases as well as COVID-related co morbidities.”

There is growing evidence that smoking and smokeless tobacco increases the risk for severe Covid 19 infection. Smoking worsens lung function and reduces immunity. Tobacco users who develop Covid infection have more complications and a greater risk of fatality. It is urgent to increase taxes on all tobacco products to reduce their affordability & consumption and limit the increasing health and fatal damages and vulnerability to COVID infection

There has not been any major increase in tobacco taxes since the introduction of GST in July 2017 and all tobacco products have become more affordable over the past three years. The total tax burden (taxes as a percentage of final tax-inclusive retail prices) is only about 52.7% for cigarettes, 22% for bidis, and 63.8% for smokeless tobacco. This is much lower than the WHO recommended tax burden of at least 75% of the retail price for all tobacco products.

India has the second-largest number (268 million) tobacco users in the world and of these 13 lakhs die every year from tobacco-related diseases. Nearly 27% of all cancers in India are due to tobacco. Tobacco use in all forms (smoking/ chewing) is associated with severe COVID-19 casualties as per the Ministry of Health and Family Welfare and the Indian Council of Medical Research. The annual economic costs from all diseases and deaths attributable to tobacco use are estimated to be Rupees 177,341 crores in 2017-18 amounting to 1% of India’s GDP. This will continue to grow post-COVID.

error: Content is protected !!
%d bloggers like this: