Experts under the Tobacco Free Kerala umbrella have raised the issue of classifying different tobacco products in lower rate slabs.
A coalition of organisations fighting against the ill-effects of tobacco in Kerala have appealed to the Union Finance Minister to include all tobacco products including beedis in the demerit goods category. The appeal comes ahead of a crucial meeting of the GST Council on February 18 that will discuss the categorisation of tobacco products.
Experts under the Tobacco Free Kerala umbrella have raised the issue of classifying different tobacco products in lower rate slabs. In a letter to the finance minister Arun Jaitley, the coalition raised concerns over the chances of the move to prompt users to switch to lower priced products including beedis, damaging their health in the process, they said.
"Increasing the prices of tobacco products high enough to dissuade use is the need of the hour in the wake of reiterated evidence on the relation between tobacco use and cancer in the country. All tobacco products should be taxed at equal rates to prevent switching over from a higher priced product to a low priced one," wrote Dr Paul Sebastian, Chairman, Tobacco Free Kerala. Sebastian is also the Director of Regional Cancer Centre in Thiruvananthapuram.
According to Dr Rijo John, Assistant Professor, IIT Jodhpur, who's authored an article on Tax Treatment of Tobacco Products under the GST in India, " "Unless corrective measures are taken in the impending GST by bringing all tobacco products under the highest demerit rate of 28 per cent and the highest possible cess, it would be a severe blow to public health in India."
Why it matters
According to the latest Global Adult Tobacco Survey, beedis are the most commonly used tobacco products in India, accounting for 64 per cent of all tobacco consumption and are disproportionately consumed by the poor.
Citing taxation is best possible intervention to tackle the tobacco epidemic, the World Health Organisation recommends that tax share should represent at least 75 per cent of retail prices of tobacco products.
Back story
In the Union Budget 2017-18, additional duties of excise and basic excise duties on various tobacco products amounted to an increase of only six per cent in total excise on almost all tobacco products. In the case of beedis, the total increase in excise tax of paper-rolled hand-made beedis was 25 per cent. However, paper-rolled beedis constitute only miniscule portion of the beedi market, as the majority 98 per cent of all beedis consumed in India are tendu rolled/hand-made.
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