GST: Health experts seek 40 p.c. sin tax on tobacco products

November 03, 2016 12:00 am | Updated December 02, 2016 01:10 pm IST - Bengaluru:

Demanding a 40 per cent sin rate on tobacco products, including cigarettes, beedis and chewing tobacco, under the Goods and Services Tax (GST), experts from the Institute of Public Health (IPH) have said that goods that are harmful to society, categorised as “sin”, should be taxed at the highest rate.

In a press release issued here on Tuesday, Upendra Bhojani, assistant director, IPH, and U.S. Vishal Rao, oncologist and member of Karnataka’s high-powered committee for tobacco control, have said that the chief economic adviser’s report has also recommended a 40 per cent GST sin rate on tobacco products.

“The GST council meeting that concluded on October 20 proposed only 26 per cent GST sin rate which will have a significant impact on the revenue as well as the health of our nation. The rationale for a sin tax is twofold: to pay for the damage caused to society by products like tobacco, and to increase the price and reduce their usage. A 26 per cent rate will defeat both these purposes. It will significantly reduce current revenues from tobacco and will actually make tobacco products more affordable and encourage consumption, especially among vulnerable population,” the release said.

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