​​​
  1. Unless taxes on bidi and smokeless tobacco are increased drastically, hard for India to stub it out

Unless taxes on bidi and smokeless tobacco are increased drastically, hard for India to stub it out

Unless taxes on bidi and smokeless tobacco are increased drastically, hard for India to stub it out

By: | Published: June 1, 2018 4:46 AM
taxes on bidi, smokeless tobacco, India, WHO, Institute of Competitiveness, Taxes on cigarettes The government was considering, Reuters had reported in January this year, using the res extra commercium (outside the scope of commerce) doctrine to drive a ban on tobacco. (Reuters)

Of the 7 million who die because of tobacco every year around the globe, close to a million don’t even consume it in any form. They die simply because others around them smoke. Tobacco use, as per the WHO, costs economies $1.4 trillion a year. That reality should be sobering for India, where 14% of adults smoke. Given the costs to public health and to the economy—that outstrip India’s health spend—it is worrisome that India still dithers on a stringent anti-tobacco policy.

The government was considering, Reuters had reported in January this year, using the res extra commercium (outside the scope of commerce) doctrine to drive a ban on tobacco. But, nothing has materialised since. The only bright spot is that the mandatory pictorial warning requirement has been extended up to August 31, 2018, even as the Supreme Court is hearing a petition on the Karnataka High Court’s decision to strike down the requirement. Taxes on cigarettes, too, are raised every year, but the acreage under tobacco and production have only grown.

Some 3.5 million livelihoods are dependent on tobacco—unless they are shifted out of it, a ban isn’t really possible. The real problem is that higher taxes make a difference only to cigarette prices. The GST Council imposed a cess on cigarettes after it was found that under GST, they attracted a lower tax incidence than before. But, as far as bidis and smokeless tobacco are concerned, the rise in prices has been marginal.

In fact, as per a study by the Institute of Competitiveness, the price of the average bidi pack has increased by just 20 paise. The Global Adult Tobacco Survey 2016-17 found that bidi, khaini and different forms of smokeless tobacco accounted for 89% of tobacco use while cigarette just made up 11%-unless the government imposes larger taxes on these forms of tobacco, India will never stub tobacco out.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Go to Top