Consumer VOICE

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Increase Cess on tobacco products to increase revenue for disaster management

Consumer VOICE along with its state partners has been working on tobacco control movement through various activities and in the month of October it focused on Increasing cess on tobacco products thereby increasing the revenue of the Government.

Consumer groups along with health groups, doctors and economists are urging the Group of Ministers (GOM) in the GST Council to increase cess on tobacco products for raising the much needed disaster remediation revenue.This would be a win-win situation for the government. As we all know Kerala has suffered huge financial and physical loss due to the flood that swept across the state recently. By imposing higher cess on tobacco products, it will not only help the government cover the loss due to the natural calamity but also help reduce consumption of tobacco products. Global experience around the world has shown that even while such a tax increase will decrease use, government revenue will increase.

Mr AshimSanyal, COO of Consumer VOICE is also of the opinion that “Imposing additional cess on all tobacco products, including bidis, will be a huge win for public health and revenue generation...”

World Health Organisation (WHO) recommends countries to impose tobacco excise taxes that amount to at least 75% or more of retail price to achieve the dual objective of reducing tobacco use and increasing government revenue.

Tax burden on bidis post-GST is only 22% compared to 53% for cigarettes and about 60% for smokeless tobacco.  All of these are well below the WHO recommended rate of 75%.

Unfortunately, taxation levels on bidis have remained low based on the arguments that bidis are a poor man’s pleasure and higher taxation will affect the livelihood of millions who depend on the trade for their sustenance. Bidis contribute to the majority of the 10 lakh deaths in India every year as well as the staggering economic burden caused by tobacco use and tobacco related diseases.

Since tobacco taxes are particularly effective in reducing tobacco use among vulnerable populations, higher taxes on bidis will protect India’s weakest strata.  It is thus ironical that bidis unlike cigarettes is not classified as a “sin” product under GST even though it is causing health and economic harms to millions of poor Indians. The total economic costs attributable to bidi smoking from all diseases and deaths in the year 2017 for persons aged 30-69 years amounted to INR 805.5 billion (USD 12.4 billion) while the excise tax revenue from bidi was only INR 4.2 billion in 2017 which is only 0.5% of this costs.

Therefore Consumer VOICE and its state partners have urged respective health ministers to consider an increase in cess in tobacco products and have all tobacco products taxed at the same levels across India. Increasing cess will also prevent youngsters who are country’s future from using tobacco products as Mr Sanyal also emphasises thatincrease in cess will motivate millions of tobacco users to quit and prevent youngsters from initiating tobacco use.

Media Coverage

Media Coverage States: Imposing Cess on Tobacco products: Assam, Punjab, Maharashtra & Uttarakhand

Assam Tribune

The Sentinel

The Assam Post

The Tribune

Dainik Bhaskar


Divya Himachal



Aaj ka Mudda


Online Coverage:

The Sentinel-CLPF for cess increase on tobacco products

The Assam Tribune- Raise cess on tobacco products for disaster remediation revenue

United News of India(UNI)-
Consumer Voice urges to increase cess on tobacco products

Wishavwarta-Punjab Finance Minister urged to increase cess on tobacco

Divya Patwal


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