Government wants you to ditch tobacco by making it costlier

The Indian Government is planning to introduce all kinds of taxes for tobacco products under Goods and Services Tax (GST) regime.

The government wants to you to consume less tobacco products and in this regard, the government might introduce 28% tax all such products, including bidis.

The Arun Jaitley-led Finance Ministry has already put aerated drinks, tobacco products, luxury cars and pan masala in the 'demerit goods' category, which is attract higher taxes in GST. The health ministry suggested the cess levied under the GST should be high enough to make these products unaffordable over a period of time.

The health ministry, in its memorandum, suggested that exemptions from the high taxation norms should not be extended to industries with low turnover such as bidi manufacturers as this will allow them to manipulate norms.

"Taking advantage of this exemption, bidi manufacturers closed bigger units and started producing on small scale under different names in a clandestine manner, resulting in huge tax evasions," the memorandum said.

As per government estimates, merely the health cost on account of tobacco consumption is pegged at over Rs 10,40,500 crore in 2011 for people aged between 35 to 69 years. Every year, about 10 lakh Indians die from tobacco-related diseases.