New Delhi, 20 December 2024: Taxes on cigarettes and tobacco products may rise significantly, with the Group of Ministers (GoM) recommending an increase in GST from 28% to 35% under the ‘sin tax’ category. This proposal, aimed at reducing tobacco consumption, is set to be reviewed at the GST Council meeting on December 21.
Experts accentuated the health and economic benefits of the move. Dr. Alok Thakur, a professor at AIIMS, underscored that tobacco-related illnesses heavily burden India’s healthcare system and said higher taxes have proven effective in lowering usage globally.
Supporting the idea, Dr. Arvind Mohan, a health economist, pointed out that reducing tobacco consumption aligns with India’s developmental goals.
ICMR scientist Dr. Prashant Kumar Singh raised concerns over the alarming toll of tobacco use, with millions of deaths between 2019 and 2021. He noted India’s tobacco tax rates fall short of WHO’s recommended 75% of retail price, standing at just 57.6% for cigarettes and 22% for machine-made bidis.
The council will also consider reducing GST on essential items like notebooks, bottled water, and bicycles, along with a potential cut in health and life insurance premiums. Experts suggest revenue generated from tobacco taxes could fund preventive health services and set a precedent for taxing other harmful products such as soft drinks.
