In yet another measure to discourage tobacco consumption in the country, the Union Health Ministry has asked the States to consider levying a uniform VAT of at least 50 per cent on tobacco-made products, including bidis.
Presently, Rajasthan is the only State which has levied VAT of 60 per cent. In a letter to the State Chief Ministers, Union Health Minister Harsh Vardhan asked them to frame a tax policy making tobacco products less affordable over the time.
Vardhan has been championing the cause of preventive health care, arguing that a robust preventive mechanism would result in fewer people turning up at hospitals. He has also been vigorously advocating against the use of tobacco products.
last month, Vardhan had sought an increase in tax on cigarettes of all lengths by Rs 2 to Rs 3.5 per stick as well as removal of tax exemption granted to bidi makers to curb people from smoking by making it costly.
Stating that Non-communicable Diseases (NCDs) due to tobacco related products were the leading cause of death, globally as well as in India, Harsh Vardhan said the role of fiscal policy tools, especially price and tax policies, have been widely recognised as one of the most effective means of influencing the demand and consumption of tobacco products.
“The negative relationship between price and tobacco use has been demonstrated by numerous studies. As per a study conducted in India in 2010 a 10 per cent rise in bidi prices results in a 9.2 per cent reduction in bidi,” he noted.
Besides being a major health risk, the use of tobacco and associated mortality and morbidity are a significant economic burden on society, Harsh Vardhan said referring to a report ‘Economic Burden of Tobacco Related Diseases in India’ released recently.