The Voluntary Health Association of India (VHAI) has opposed the GST Council meeting’s proposal on October 20 for a 26-per cent GST on tobacco products. The VHAI said this would have significant impact on the revenue and health of the nation. Instead, goods that are harmful to society, categorised as ‘sin’ such as tobacco should be taxed at the highest rate under GST as recommended in the Chief Economic Advisor report which seeks a 40 per cent GST sin rate on all tobacco products like cigarette, bidis and chewing tobacco, the VHAI demanded. The organisation said the country has the second largest number of tobacco users (275 million or 35% of all adults).
Of these, at least one million die every year from tobacco related diseases. Approximately, 48% of men and 20% of women consume tobacco (35% of adult population overall). Of these, 10 lakh are dying due to tobacco related diseases. Mumbai Tata Memorial Hospital Oncologist Dr Pankaj Chaturvedi said a much lower GST rate would make all tobacco products even more affordable to youth and other vulnerable populations, leading to the impact of tobacco epidemic becoming more severe driving up healthcare costs and resulting in productivity losses. He urged the Government to tax the tobacco products at very high rates to discourage its mass consumption. Bidis comprise 48% of the tobacco market, chewing tobacco 38%t and cigarettes 14%. According to Consumer Voice COO Ashim Sanyal, with 85% of smoked tobacco being consumed as bidis, a large percentage of 10 lakh tobacco related deaths occur because of bidi use.
Treating bidis under the highest category for sin products to attract maximum tax would not only save lives of lakhs of poor Indians but also help reduce the overwhelming health disparities between various strata of society. VHAI CEO Bhavna Mukhopadhyay said continuing to sell cheap and virtually tax exempt bidis in the new GST system would ensure that the poor continue to be trapped in vicious cycle of poverty and ill health and spend less on food, healthcare and education.
The Government should not be seen supporting an industry that destroys 10 lakh families each year for amassing vulgar wealth, he said.