Ahead of a crucial meeting of the Good and Service Tax Council, doctors and public health campaigners asked the council to tax tobacco products uniformly at the highest GST rate of 40% in order to save millions of Indians from death.
Over the next three days, the council headed by Finance Minister Arun Jaitley is likely to decide on the GST rates for a large number of items as the Finance Ministry set up a deadline of November 22 to build consensus on contentious issues.
Doctors, public health advocates and few political leaders on Monday asked the council to accept 40% GST rate on tobacco products, including bidi and chewing tobacco, to discourage their use. "With the current tax pattern on bidi, consumers and the nation are losers whereas bidi industry owners are making profits. It is shocking that there is no tax on bidis in many states. All tobacco products should be taxed very high in the GST era", said Pankaj Chaturvedi, oncologist, Tata Memorial Hospital, Mumbai. The anti-tobacco campaigners pin their hopes on a 2015 report made by a high-level panel chaired by Chief Economic Adviser Arvind Subramanian. The committee recommended 40% GST for tobacco and tobacco products by putting them on the demerit list.
The panel recommended to have a demerit goods rate, which would be higher than the standard rates for discouraging their use. Luxury cars, aerated beverages, paan masala, tobacco and tobacco products were recommended to be on the demerit list for 40% GST.
"The government should make tobacco prohibitively expensive in the GST era. There is no justification for giving any subsidy to a product that kills every second user prematurely," said Trinamool Congress MP Dinesh Trivedi, a former minister of state for health.
A senior BJP leader from Bihar too supported the public health advocates. "As a health minister of Bihar I had banned gutka and raised taxes on tobacco products including bidi. I am sure the GST council will put tobacco in highest tax category. It will save millions of lives," said Ashwini Kumar Chaube, former health minister of Bihar and BJP MP. Activists stepped up the campaign because of the health and economical burden imposed by tobacco. Each year, almost a million Indians die from tobacco-related diseases in India, while the total direct and indirect cost of diseases attributable to tobacco use was Rs 1.04 lakh crore ($17 billion) in 2011, which comes to 1.16% of GDP.