Thu Dec 19 12:10:00 UTC 2024: ## Experts Urge Higher “Sin Tax” on Tobacco Ahead of Crucial GST Council Meeting

**New Delhi, December 19** – Health and economic experts are urging the Goods and Services Tax (GST) Council to significantly increase the tax on tobacco products ahead of its December 21 meeting. A webinar organized by Tobacco Free India highlighted the need for a 35% “sin tax” on tobacco, up from the current 28%, aligning with a recent Group of Ministers (GoM) recommendation.

The experts argued that this increase would not only save lives by curbing tobacco consumption but also boost the economy and contribute to a healthier India. They pointed to the unsustainable burden tobacco-related diseases place on the country’s healthcare system, noting that 2.6 million deaths were attributed to these diseases between 2019 and 2021.

Dr. Alok Thakar, Head of the National Cancer Institute, emphasized the need to include all tobacco products under this higher tax bracket to prevent consumers from switching to cheaper alternatives. Similarly, Dr. Arvind Mohan, Professor of Health Economics at the University of Lucknow, linked increased tobacco taxation to India’s ambition of becoming a developed nation, highlighting the importance of protecting human capital.

The proposed increase, experts suggest, could offset planned GST reductions on essential goods like notebooks and bicycles, while simultaneously funding preventive healthcare initiatives. Dr. Pritam Datta, Fellow at the National Institute of Public Finance and Policy, warned that India’s current tobacco tax rates lag significantly behind World Health Organization (WHO) recommendations, which suggest taxes should constitute at least 75% of the retail price. He stressed the urgency of action before the Compensation Cess expires in March 2026.

The GST Council, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, will consider these proposals, which also include a new 35% tax slab for other sin goods like aerated drinks and lower GST rates on essential items and insurance premiums. The experts’ consensus is that a higher sin tax on tobacco is not just a revenue-generating measure but a crucial step towards improving public health and achieving India’s development goals.

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