Ahead of a GST Council meeting to be held in New Delhi on February 18, several public health groups under the aegis of Voluntary Health Association of India have urged Union Finance Minister Arun Jaitley and his advisers to impose 28 per cent GST rate on all tobacco products, including bidis.
These groups have also strongly recommended that tobacco products, including bidis, should be taxed at uniformly high rates under the new tax regime as tobacco consumption kill around 10 lakh people in the country annually.
The move is significant as it comes a few days ahead of the GST Council meet, which is expected to discuss the rate slabs for different goods and services.
With the total tax burden currently at 53 per cent, 19.5 per cent and 56 per cent, respectively, for cigarettes, bidis and smokeless, tobacco taxation in India is much lower than the level recommended by the WHO, which is 75 per cent of the retail price.
The Union Budget 2017-18 also did not address this anomaly with an effective tax increase of 6 per cent, lower than at least the 10% increase witnessed in previous budgets.
With 10 lakh people dying due to tobacco every year, public health advocates believe that the Government’s taxation policies in the tobacco sector have left public health concerns unaddressed.
Bidis are the most commonly used tobacco product in India, accounting for 64 per cent of all tobacco consumption and it contributes to the majority of the 10 lakh deaths.
India has the second largest number of tobacco users (275 million or 35 per cent of all adults in India) in the world. Approximately 48 per cent of men and 20 per cent of women consume tobacco in the country.
While Bidis comprise 48 per cent of the tobacco market, chewing tobacco is 38 per cent and cigarettes 14 per cent. So it is evident that bidis account for a significant portion of deaths, according to experts.
According to Dr Rijo John, Assistant Professor, III Jodhpur, “The tobacco industry knows how to exploit its consumers by increasing prices, hut disappointingly, the Government doesn’t increase taxes on tobacco products substantially. As against a normally expected 10 per cent to 15 per cent increase, the Government has announced a mere 6 increase this year.”
Dr Pankaj Chaturvedi, Oncologist, Tata Memorial Hospital, Mumbai, said there is no logic in giving subsidy to a product takes valuable lives.
“In fact, bidi is the cheapest and an unregulated poison currently available in the market. With current tax pattern, consumer and the nation are losers, whereas handful of bidi and chewing tobacco industry owners are making vulgar profits by selling this weapon of mass destruction.”