Bidis tagged 'demerit goods', maximum tax fixed at 28%
Date:2017-6-12 21:01:36 Clicks:602 【Font Size:
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BENGALURU: After repeated appeals from Association of Private Hospitals of India(APHI) to the government to tax bidis at 28% under Goods and Service Tax (GST) to bring down bidi consumption in the country, GST council has made a landmark decision by categorising all tobacco products including bidis as demerit goods and taxing them at the highest tax rate of 28%.
The public health fraternity along with city doctors have welcomed this positive move which according to them would not only discourage consumption of tobacco and save lives of 275 milliontobacco users in the country but would also increase revenue collection for the government.
"Categorizing all tobacco products at the highest GST rate, including bidis, is one of the boldest and most impactful public health decisions that Indian Government has taken to protect the health of its citizens from the growing menace of tobacco addiction. Taxing bidis at 28% will prevent death and disease not only amongst millions of bidi users, but also amongst bidi workers who are mostly women and children," said Dr Ajai Kumar, Chairman HealthCare Global (HCG) Cancer Hospital and President of APHI - Karnataka chapter.
"The government's bold decision to tax bidis at the highest level gives us courage and confidence that the real voice of bidi workers has been heard and that the government is serious in addressing the enormous health harms that are faced not only by workers but also users," said Thangam, 45, who has been rolling bidis since she was 10 years old.
Bidis are the most commonly used tobacco product in India, accounting for 64% of all tobacco consumption and are disproportionately consumed by the poor.
"We cannot go on subsidizing death for the poor, and justify low taxes for bidis which is one of the most preventable causes of death in India for rural poor. By keeping bidis in the demerit goods category of GST, government has demonstrated tremendous commitment towards safe guarding the health of poor in India and protecting them from the growing menace of tobacco products," said Dr US Vishal Rao, head and neck Oncologist and member of high power committee on tobacco control, government of Karnataka.