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VHAA appeals to the GST Council for highest tax on tobacco

Press Trust of India  |  Guwahati 

The Voluntary Health Association of has appealed to the GST Council to recommend a highest possible tax rate under GST with a provision for states' right to impose top-up taxes on all types of tobacco.

To safeguard public health, discourage consumption and addiction amongst Indians, the VHAA wanted the top-up tax to be imposed on cigarettes, bidis, smokeless tobacco and pan masala.

The NGO's executive secretary, Ruchira Neog, said, "It has been proven globally that the most direct and effective method for reducing tobacco consumption is to increase their price through tax increases."

"An increase in tobacco prices by 10 per cent decreases tobacco consumption by 4 per cent in high-income countries and by about 6 per cent in low-and middle-income countries," it said.

The organisation also stated that the current taxation system differentiates between various forms of tobacco products (such as bidis, smokeless tobacco and cigarettes) while imposing taxes.

It is most critical that ALL tobacco products within GST and under the highest category for demerit or sin products to attract maximum tax, she says.

"Distinguishing tobacco products with different GST rates would inadvertently pass the wrong message that some tobacco products are less harmful than the other," Neog pointed out.

According to the 2015 WHO Report on the Global Tobacco Epidemic, India is one among the very few countries where cigarettes have become more affordable over the past few years - not getting the treatment of tobacco products right under the new GST system will only make matters worse and cause many more premature deaths, asserted the VHHA executive sectretary.

Even as the industry is opposing the recommendations to impose the 'sin tax' rate of 40 per cent on tobacco, it is important to note that tobacco taxation in India is way below global standards, Neog said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, October 17 2016. 18:57 IST