Vardhan pushes for 50% VAT on tobacco products

The health minister gave examples of Rajasthan that has 65 per cent VAT and J&K which has 40 per cent VAT.

By: Express News Service | New Delhi | Published:July 6, 2014 3:42 am

Union Health Minister Harsh Vardhan has written to state chief ministers, urging them to levy a VAT of at least 50 per cent on all tobacco products to act as a deterrent for users and to also discourage youth from taking to it.

Citing the health costs of tobacco as brought out by a recent report on the economic burden of the addiction, the health minister gave examples of Rajasthan that has 65 per cent VAT and J&K which has 40 per cent VAT.

“In view of the huge public health costs and implications, there is a need for a comprehensive tax policy for all tobacco products so that they are taxed at similar rates and incentive to shift to relatively cheaper tobacco products is minimised. It is also important that under the policy, tax rates are linked to both inflation and changes in household income…,” he wrote.

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