On the occasion of World No Tobacco Day, the public health groups along with doctors have urged the GST Council to increase compensation cess on all tobacco products to generate additional revenue for the government to aid the COVID-19 vaccination drive.
The public health group said that tax revenue from tobacco could significantly contribute to the increased need for resources during the pandemic including vaccinations and augmenting the health infrastructure to prepare for a possible third wave and also address the economic shock from COVID-19 pandemic, an official statement said on Monday.
“The GST revenue receipts of both central and states governments have been severely affected due to the COVID-19 pandemic and, as a result, the Central government has not been able to distribute the compensation cess dues to different state governments as guaranteed under the GST,” it said.
“Increasing the existing compensation cess on cigarettes and smokeless tobacco products and levying compensation cess on bidis can be a very effective policy measure to address the immediate need to raise revenue by the Central government to compensate state governments for their respective GST revenue shortfalls during the pandemic time. It will be a winning proposition for generating revenue and reducing tobacco use and related diseases as well as COVID-related comorbidities,” it added.