May 26, 2021 11:45:27 pm
A consumer rights organisation — Consumer Voice — on Wednesday urged the GST Council to increase tax on all tobacco products in Haryana to generate additional revenue for the government that can then be used for fighting the Covid-19 pandemic.
In their appeal to the Goods and Services Tax (GST) council before its meeting scheduled on May 28, COO of Consumer Voice Ashim Sanyal said, “This tax revenue from tobacco could significantly contribute to the increased need for resources during the pandemic, including vaccinations and augmenting the health infrastructure to prepare for a possible third wave.”
“Unprecedented financial resources will be needed for the country to recover from the economic shock that Covid-19 has created. Increasing compensation cess on all tobacco products will be a win-win proposition as it will bring in substantial revenue for the government while motivating millions of tobacco users to quit and preventing youngsters from initiating tobacco use,” he added.
According to a release issued by Consumer Voice, “There has not been any major increase in tobacco taxes since the introduction of GST in July 2017 and all tobacco products have become more affordable during the past three years”. The total tax burden (taxes as a percentage of final tax inclusive retail price) is only about 52.7 per cent for cigarettes, 22 per cent for bidis and 63.8 per cent for smokeless tobacco. This is much lower than the World Health Organization (WHO) recommended tax burden of at least 75% of retail price for all tobacco products,” says the organisation.
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