"Government Increases Custom Duty on Cigarettes by 16%, Impacting Smokers in India" 


Introduction:
The Indian government recently announced an increase in custom duty on cigarettes by 16% during the Union budget presentation. The announcement was made by the Finance Minister, Nirmala Sitharaman, on Wednesday. The move is expected to have a significant impact on smokers in India as the cost of purchasing cigarettes is set to rise.

Expert Views on Taxation on Tobacco Products:

Taxation on tobacco products is a highly debated topic, with experts having varying views on its effectiveness. However, many experts believe that taxation on tobacco products can be a very effective tool for generating revenue. This is due to the elastic nature of the product, which means that a high tax rate will not negatively affect the revenue earnings of the government.

India is one of the 182 countries that have signed the WHO Framework Convention on Tobacco Control, which recommends a minimum tax rate of 75% on the retail price of all tobacco products. The intention behind such a high tax rate is to discourage the use of tobacco products, and to make them less affordable.

However, in India, the tax rate for cigarettes is currently 52.7%, 22% for 'bidis' and 63.8% for chewing tobacco. This means that tobacco products are still affordable to a large section of the population. Many experts believe that the tax rate on tobacco products needs to be increased in India to have a greater impact on reducing their consumption.

An increase in tax rate will not only help in reducing the consumption of tobacco products but will also help the government in generating revenue. The additional revenue generated can then be utilized for various public health initiatives and for improving the overall healthcare system in the country.

While the government has increased the tax rate on tobacco products in recent years, there is still room for improvement. It is essential to understand that taxation on tobacco products is not just a means of generating revenue but also a way to protect the health of the population.

On the other hand, some experts believe that increasing the tax rate on tobacco products may not be the only solution. The informal sector in India, where the majority of tobacco products are sold, is not well regulated, making it difficult for the government to monitor and enforce the tax laws. The informal sector also provides an avenue for the sale of illicit and cheaper tobacco products, which are not taxed. This results in the government losing out on revenue and also creates a hurdle in the implementation of effective tobacco control policies.

To effectively address this issue, the government needs to focus on regulating the informal sector and ensure that all tobacco products are taxed. The government can also work with organizations to create awareness about the dangers of using tobacco products and to promote alternatives.


Tobacco Usage in India:

India is one of the largest consumers of tobacco in the world, with nearly 27 crore adults using tobacco in some form, according to the Global Adult Tobacco Survey-India (GATS-2016-17). The use of tobacco is a major public health concern in India, as it is a leading cause of preventable deaths. Despite the efforts of the government and various organizations to reduce tobacco consumption, the numbers continue to rise.

The most common form of tobacco consumption in India is smoking, followed by chewing and sniffing. The widespread use of tobacco is attributed to a variety of reasons, including peer pressure, habit, and the perception that it is a stress-reliever. The tobacco industry also heavily markets its products, making them appealing to younger generations.

The government of India has taken various measures to reduce tobacco consumption, including increasing the customs duty on tobacco products, which is expected to have a significant impact. The government has also implemented various health warnings on tobacco packaging and has banned smoking in public places.

Despite these efforts, the use of tobacco continues to be a major problem in India. The tobacco industry is highly profitable, and the economic benefits of tobacco cultivation and sale are significant. The industry is also highly influential, making it difficult for the government to implement effective measures to reduce its use.

Tobacco use is not only harmful to the individual, but also to those around them, as second-hand smoke can cause a variety of health problems. The use of tobacco is also a significant financial burden on the country, as it increases healthcare costs and decreases productivity.

To effectively reduce tobacco usage in India, a multi-faceted approach is necessary. This includes educating the public about the dangers of tobacco use, increasing taxes on tobacco products, and implementing strong marketing regulations. The government should also work with organizations and individuals to promote alternatives to tobacco use, such as sports and recreation.

Conclusion:

The Indian government's recent announcement to increase the custom duty on cigarettes by 16% will result in higher costs for smokers in the country. Experts believe that taxing tobacco products can be an effective way to generate revenue, and the move aligns with global efforts to reduce tobacco usage. With India being the second-largest consumer of tobacco, the impact of the increased custom duty is expected to be significant.

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