Higher GST on tobacco and sweet beverage

17.12.2024 - The Hindu

Past seven years, tehre was no major hike in gst rates on harmful products.

Except 2 minor hikes in National Calamity contingent duties (NCCD) on tobacco

The proposal by the Group of Ministers (GoM) to raise the highest GST tier on tobacco and sugar-sweetened beverages from 28% to 35% is a welcome step.

Excessive consumption of sugar-sweetened beverages is a major contributor to obesity, diabetes, and other NCDs.

The World Health Organization Framework Convention on Tobacco Control (WHO FCTC), to which India is a signatory, recommends that all tobacco products be taxed comparably to prevent substitution between them.

Many countries with GST or value-added tax (VAT) supplement these with specific excise duties on harmful products such as tobacco. India should consider raising excise taxes alongside the GST revision for a stronger and more comprehensive taxation framework.

Risks of tobacco

Bharat - 2nd largest consumer of tobacco with 28.6% adults above 15 years 8.5% students between 13 and 15 years consume tobacco in some forms Tobacco - leading risk factor for non communicable disease, causing over 3,500 deaths in Bharat The economic costs of not banning tobacco is around 1.4% of the GDP, in 2017 study