Increase Cess on Tobacco Items, Urged by the GST Council

Seep Gupta
Seep Gupta at May 16, 2022

Introduction

Civil Society Organisation and doctors are urging the GST council to increase the compensation cess on tobacco-based products which will further generate additional revenue for the government and will eventually reduce their consumption. It will also limit the vulnerability to covid 19 pandemic infections. This move of levying compensation cess on tobacco-based products will generate additional revenue for the government which will help in increasing the resources that are needed for covid 19 pandemic.

It will also help in the vaccination production, augmentation of health infrastructure and in the preparation of other resources needed for combating the possible fourth wave.

Taxes on tobacco are intentionally kept high to decrease their consumption and affordability. According to the oncologist, Dr Shekhar Salkar and also the president of the National Organisation for Tobacco Eradication, “there has not been any major tax increase on tobacco and other tobacco based products since the year 2017. Tobacco and tobacco based products are sold at affordable rates since the introduction of the GST in the year 2017”.

He also stated that tobacco products and tobacco have become affordable over the past three years.

Conclusion

In a nutshell, I can hereby conclude that the increased tax rate should be levied on tobacco and tobacco based products to decrease their production. It will also decrease their accessibility to the consumers which will further reduce their consumption. If it will be implemented, it will be a welcoming move for everyone.

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