BENGALURU: Though Karnataka recently banned all forms of chewing tobacco, the Chief Economic Advisor’s report seeks a 40 per cent GST sin tax on all tobacco products.
The GST council meeting that concluded on October 20 proposed a much lower 26 per cent GST sin tax. This would have significant impact on the revenue as well as the health of the population, both of which require consideration, said public health experts.
A 26 per cent tax would make tobacco products more affordable and encourage consumption, especially among vulnerable population, including children and youth, they said.
“A much lower GST tax would lead to higher tobacco consumption, drive up health care costs and decrease productivity of the population. Number of fatalities will increase. Tobacco products should be taxed high to discourage mass consumption,” said Dr U S Vishal Rao, oncologist and member of high-
powered committee for tobacco control, Government of Karnataka.
Dr Upendra Bhojani, assistant director, Institute of Public Health, said, “The curent tobacco tax differentiates between various forms of tobacco products such as bidis, smokeless tobacco and cigarettes. Virtually tax-exempt bidis are being sold to the underprivileged.
Going by the proposed rates, even the new GST system will ensure that the poor continue to be trapped in the vicious cycle of poverty and ill health. Addiction causes them to spend more on tobacco and less on food, healthcare and education. We would urge the central and state governments to tax all forms of tobacco including bidis at 40 per cent under GST regime, to insulate the population from its ill effects.”
Durgaiah, a farmer from Kanakapura taluk of Ramanagara district, smoked beedis for 30 years and was eventually diagnosed with throat cancer. Later, his voice box was surgically removed. “I wonder why the Government makes beedis so cheap if they have bad consequences. Is it really concerned about the poor?,” he asked.
He said that the government should make beedies costlier than cigarettes and keep it beyond the reach of a poor man in a village. India has the second largest number of tobacco users (27.5 crore, which equals to 35 per cent of all adults) of these at least 10 lakh die every year from tobacco-caused diseases.
The total cost of diseases attributable to tobacco-use is `1.04 lakh crore in 2011, which equals to 1.16 per cent of India’s GDP.
Approximately 48 per cent of men and 20 per cent of women consume tobacco. Bidis comprise 48 per cent of the tobacco market, chewing
tobacco 38 per cent and cigarettes 14 per cent.
It is evident that bidis account for a significant portion of tobacco-caused deaths.
Sin taxes are imposed to discourage consumers from using goods or services that are seen as undesirable or deterimental to the society.