GoI Demands 28% Tax On All Tobacco Products

Aiming at reducing the consumption of tobacco products, the Health Ministry has deliberated taxation of all such products, including bidis, at 28%, as well as imposing higher cess under the new GST regime.

Addressing the step taken by the Finance Ministry to keep aerated drinks, tobacco products, luxury cars and pan masala in the ‘demerit goods’ category, the Health Ministry suggested that the cess levied under the GST should be high enough to make these products unaffordable over a period of time.

As reported in a national business daily, an office memorandum issued by the Health Ministry, recently, suggested that exemptions from the high taxation norms should not be extended to industries with low turnover like bidi manufacturers as this will allow them to manipulate norms.

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