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GUWAHATI: Public health groups along with doctors and economists are urging the GST Council to increase compensation cess on all tobacco products that can provide additional tax revenue of Rs. 49,740 crores. This additional revenue could significantly contribute to the increased need for compensation by different States during the pandemic and to disburse the dues already owed by the Centre. They all are appealing to the GST Council to apply the compensation cess on bidis and also increase the existing compensation cess applied on cigarettes and smokeless tobacco products during the upcoming meeting of the GST council, a release stated.
According to Dr. Rijo John, Economist & Health Policy Analyst, "Unprecedented financial resources will be needed for the country to recover from the economic shock COVID-19 has created. Even though imposing additional taxes on the general public might not be a viable policy option when consumption needs to be boosted, compensation cess on tobacco could be a win-win as it will discourage tobacco consumption while bringing in substantial revenue for the government. A Rs. 1 compensation cess per stick of bidis and significant cess increases on cigarettes and smokeless tobacco products are expected to generate additional tax revenue to the tune of Rs. 50,000 crores.''
The group suggests that such measures can be more attractive solution than market borrowing to compensate state governments for their respective GST revenue shortfalls during the pandemic time. They are also easy to integrate into the existing tobacco tax system. In addition, it will be a win-win for revenue and public health by reducing tobacco use and related diseases as well as COVID related co morbidities.
Advocate Ajoy Hazarika, Secretary, Consumers' Legal Protection Forum, Assam said, "Increasing compensation cess on all tobacco products, including bidis, is a winning proposition for Government as it will provide the Govt. much needed additional tax revenue by motivating millions of tobacco users to quit and preventing youngsters from initiating tobacco use."
"There is ample evidence about bidis being the killer and not the pleasure of the poor. These should be made unaffordable for the poor to save them from a lifetime of misery and suffering," said Dr. A.C.Kataki, Director, Dr. B. Borooah Cancer Institute, Guwahati.
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