GUWAHATI, Oct 14 - Consumer and health groups have urged the Group of Ministers (GoM) in the GST Council to increase cess on tobacco products for raising the much-needed disaster remediation revenue.
Appreciating the leadership and vision of the GST Council to help Kerala raise funds for rehabilitation of its people affected by the recent floods, the groups have suggested raising cess on tobacco products to address the crisis facing by the citizens of Kerala.
�Imposing cess on all tobacco products to raise revenue for disaster relief is a win-win situation as it will save lives by reducing consumption across India and save lives affected by natural calamities. Global experience around the world has shown that even while such a tax increase will decrease use, the government revenue will increase in return,� they said.
�By putting additional cess on tobacco products, the government will move closer to its commitment towards safeguarding the health of poor in India. This is also a significant step in creating more revenue for governments which can be utilised in disaster relief,� Advocate Ajoy Hazarika, secretary of Consumers' Legal Protection Forum, said in a statement.
In their appeal to GoM members, consumer groups and public health groups have stated that it is critical from a public health and tax administration perspective to have all tobacco products taxed at the same levels across India.
�This will also prevent any undue advantages gained from the inter-State smuggling of tobacco products based on differential pricing amongst States,� they said.
�Imposing additional cess on all tobacco products, including bidis, will be a huge step for public health and revenue generation. This move will provide the much-needed relief to the people of Kerala while motivating millions of tobacco users to quit and preventing youngsters from initiating tobacco use,� said Ashim Sanyal of Consumer VOICE.
WHO recommends that countries impose tobacco excise taxes that amount to at least 75 per cent or more of the retail price to achieve the dual objective of reducing tobacco use and increasing government revenue. The overall tax rate on all tobacco products in India is still very low compared to other middle-income countries including those in South Asia.
In spite of industry claims to the contrary, the GST Council has made all tobacco products more affordable, they added.