Cigarettes To Get More Expensive? Big GST Decision On 35% Tax On Tobacco Products Tomorrow - Details

Ahead of the crucial GST Council meeting on December 21, experts are advocating for a significant increase in the tax on tobacco and other harmful products. They support the recent recommendation by the Group of Ministers (GoM) to raise the Goods and Services Tax (GST) slab on tobacco products and aerated beverages to 35%, up from the current 28%. The move, they argue, could reduce consumption, boost public health, and provide much-needed funding for healthcare initiatives.

GST Council to Meet on December 21 to Discuss Recommendations

The GST Council, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, is scheduled to meet on December 21 to deliberate on the GoM’s proposals. These include the proposed 35% GST slab for 'Sin Goods' like tobacco and aerated beverages, as well as reductions in GST rates for essential goods such as notebooks, bottled water, and bicycles. Additionally, the GoM has recommended lowering premiums on health and life insurance.
Economic experts argue that the additional revenue from the Sin Goods tax could help offset these cuts, providing relief to consumers while advancing public health goals. However, the Central Board of Indirect Taxes and Customs (CBIC) has clarified that the reports in the media regarding GST rate changes are premature. In a tweet, CBIC stated, "The GST Council has not yet deliberated on any GST rate changes. The GoM has yet to finalize and present its recommendations to the Council, after which the Council will take a final view."

Experts Endorse Higher 'Sin Tax' to Curb Consumption
At a webinar organized by the 'Tobacco Free India' citizens' initiative, health and economic experts backed the GoM’s proposal. They emphasized that a higher tax on tobacco products would help reduce their consumption and contribute to a healthier and economically stronger India. Experts also suggested that all tobacco products should be included under the tax net to prevent users from switching to cheaper, harmful alternatives.