'Levy additional compensation cess on tobacco products'

Bengaluru: Ahead of the GST Council's 41st meeting, public health experts and economists urged the GST Council to increase the 'compensation cess' on all tobacco products.

The GST Council is scheduled to meet on August 27. Speaking at an event, economist and Health Policy Analyst Dr Rijo John said, "Coronavirus pandemic has impacted the economy in such a way that it will need unprecedented financial resources to recover from the shock. Levying additional compensation cess on all tobacco products will help boost the economy."

He suggested that by levying an additional 'Compensation Cess' of Rs 1 per on bidis, Rs 5 per stick of cigarettes and 52 per cent increase on smokeless tobacco products, additional tax revenue to the tune of Rs. 50,000 crore can be mopped up. It can be noted that 'Compensation Cess' was introduced as a relief to the States for the loss in tax revenue arising from the GST implementation.

Dr S Venkatesh, senior cardiologist, Aster RV Hospital who is an anti-tobacco advocate said, "Levying compensation cess on sin products like cigarettes, bidis and other tobacco products at a time when the state is fighting COVID-19 is the need of the hour as the move will make tobacco products unaffordable. Also, it curbs the virus spread as the immunity of tobacco users will be compromised. They are at a greater risk of contracting the virus. Coronavirus attacks the lungs and causes pulmonary stress to which deterrence is mandated."