Hyderabad: Public health groups for compensation cess hike on tobacco products

Public health groups for compensation cess hike on tobacco products
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Public health groups for compensation cess hike on tobacco products

Highlights

  • WHO recommends tax burden of at least 75% of retail price for all tobacco products
  • Its only 52.7% for cigarettes, 22% for bidis and 63.8% for smokeless tobacco

Hyderabad: Public health groups along with doctors and economists urged the Goods and Services Tax (GST) Council to increase compensation cess on all tobacco products to generate additional revenue for the Government. They appealed to GST council before its meeting on September 17.

This tax revenue from tobacco could significantly contribute to the increased need for resources during the pandemic to prepare for a possible third wave, Dr Arvind Mohan Dean Academic, University of Lucknow said, "It will be a win-win proposition for generating revenue and reducing tobacco use and related diseases as well as Covid related co-morbidities."

Bhavna Mukhopadhyay, Chief Executive, Voluntary Health Association of India said that there has not been any major increase in tobacco taxes since the introduction of GST and all tobacco products have become more affordable.

The total tax burden (taxes as a percentage of final tax inclusive retail price) is only about 52.7 per cent for cigarettes, 22 per cent for bidis and 63.8 per cent for smokeless tobacco).

This is much lower than the World Health Organization (WHO) recommended tax burden of at least 75 per cent of retail price for all tobacco products.

Dr Pankaj Chaturvedi, Head Neck Cancer Surgeon, Tata Memorial Hospital said, "There is substantial proof that tobacco increases risk for severe Covid-19 infection and complications following it. Tobacco users have greater risk of death following Covid."

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