Experts urge GOM, GST council, to increase CESS on tobacco products.

Public health groups along with doctors and economists have urged the Group of Ministers in the GST Council to increase cess on tobacco products to raise the much-needed disaster remediation revenue. Experts said global experience has shown that such a tax increase will decrease tobacco use and expand government revenue. Imposing additional cess on all tobacco products, including bidis, will be a huge win for public health and revenue generation, Bhavna B Mukhopadhyay, chief executive of Voluntary Health Association of India, said.

"This move will provide much-needed relief to the people of Kerala while motivating millions of tobacco users to quit and preventing youngsters from initiating tobacco use," Mukhopadhyay said. WHO recommends that countries impose tobacco excise taxes that amount to at least 75 per cent or more of retail price to achieve the dual objective of reducing tobacco use and increasing government revenue.

The overall tax rate on all tobacco products in India is still very low compared to other middle-income countries, including those in South Asia. Tax burden on bidis post-GST is only 22 per cent compared to 53 per cent for cigarettes and about 60 per cent for smokeless tobacco. All of these are well below the WHO recommended rate of 75 per cent, Rijo John, economist and health policy analyst, said.

It is critical that the 28 per cent GST rate category be retained for demerit or sin goods such as tobacco. This serves two purposes, as it firstly sends out a strong public health message discouraging the consumption of sin goods. Secondly, having a separate sin tax category decreases the pressure on the other...