GST Council is soft on tobacco

Goods and Services Tax (GST) Council, in its recent revision meeting, appears to have lost a golden opportunity for increasing the rate of tax on tobacco products for making the habit of smoking uneconomical to addicts.

GST has been increased on cigarette filter rods from 12 to 18% slab.  Since tobacco products are demerit goods, the rate should have been increased to maximum slab. Anti-tobacco activists are unhappy since according to guidelines of United Nations/World Health Organisation (WHO) sponsored Framework on Convention of Tobacco Control (FCTC), signatories to the protocol may levy maximum taxes to make it unaffordable and is likely to reduce consumption of tobacco products.  Many countries are levying maximum taxes.

Cigarette filters or butts are non-bio degradable, stated to have a life span of 15 years and when littered, they are a visual pollution.  Filters are made of fibrous material (Cellulose Acetate – residue by-product of crude oil), attached to cigarettes by covering the same with paper to trap tar and other toxic chemicals from burning cigarettes, before they reach the smoker’s lungs.  A discarded burning butt continues to smoulder for 3 hours and emits hazardous chemicals such as cadmium, arsenic and lead into atmosphere. These butts also leach these chemicals and contaminate ground water; also endangering aquatic living beings. Carelessly thrown burning cigarette butts have started uncontrollable grass fires in forest areas and also resulted in loss of life and properties in human habitats.

Every year, approximately 5.6 trillion cigarettes are smoked and about 4.5 trillion filter butts are discarded into the environment. They are known to have emitted millions of tonnes of CO2 and other hazardous smoke gases resulting in climate change with impact on all living beings due to global warming.

In view of the above negative points  and also since these cigarette filter rods are demerit goods,  GST Council should increase the tax to the maximum slab of 28% instead of just taking it to the next higher slab of 18%.

Source:https://citytoday.news/gst-council-is-soft-on-tobacco/

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