INDIA
The health ministry is seeking to tax all tobacco products, including bidis, at 28% as well as impose higher taxes under the new state goods and services tax (GST) bill.
Following the finance ministry’s move to keep aerated drinks, tobacco products, luxury cars, and pan masala in the ‘demerit goods’ category, the health ministry suggested that the taxes levied under the GST should be high enough to make these products unaffordable over a period of time.
The health ministry also recently suggested that exemptions from the high taxation should not be extended to industries with low turnover such as bidi manufacturers, as the manufacturers could take advantage of this by closing bigger manufacturing units and producing on a smaller scale under different names instead, resulting in huge tax evasions.
The ministry also highlighted that tiered tax structure for cigarettes needs to be done away with as these slabs open up channels to manipulate product substitution and promotion.