Health Experts Urge GST Council to Increase Cess on Tobacco Products

The public health groups, along with health experts and doctors, have urged the GST Council to increase compensation cess on all tobacco products on the occasion of World No Tobacco Day. This move will help in generating additional revenue for the government to aid the COVID-19 vaccination drive.

The public health group stated that revenue from tobacco could majorly contribute to the increased need for resources during the pandemic, including vaccinations and strengthening the health infrastructure to prepare for a possible third wave of COIVD-19.

The group said that the GST revenue receipts of central and state governments had been severely affected due to the COVID-19 pandemic. As a result, the Central Government has not distributed the compensation cess dues to different state governments as guaranteed under the GST.

The group explained that increasing the compensation cess on tobacco products and levying cess on bidis can be an effective policy measure to address the immediate need to raise revenue by the Central government to compensate state governments considering GST revenue shortfalls pandemic time. Also, it will be a winning proposition for generating revenue and reducing tobacco use and related diseases, including COVID-related comorbidities.

The health experts explained that there is growing evidence that tobacco usage increases the risk for severe COVID-19 infection by worsening lung function and reducing immunity. They stated that the tobacco users infected with COVID have more complications and a greater risk of fatality. Hence, it is vital to increase taxes on all tobacco products to reduce their affordability and consumption. Also, it will help in limiting the increasing health and fatal damages and vulnerability due to COVID-19 infection.

India has the second-largest number of 268 million tobacco users globally. Out of these, 13 lakhs die every year from tobacco-related diseases. Also, nearly 27% of all cancers in India are due to tobacco. As per the Ministry of Health and Family Welfare and Indian Council of Medical Research, tobacco use in all forms (smoking/chewing) is associated with severe COVID-19 casualties.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in

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