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Rajasthan government reduces tax on tobacco products

India TV News Desk 16 Jun 2015, 14:09:58 IST
India TV News Desk

Jaipur: In a move that may increase tobacco consumption in the state, the Rajasthan government slashed taxes on tobacco products, like cigarettes and gutka “in public interest”, by as much as 20 per cent.

The move comes six months after the World Health Organisation (WHO) applauded and honoured the state administration for its strict tax regime on tobacco products which is considered as one of the highest in the country.

The order by the state government, passed on Friday last week, reduced VAT on “tobacco and its products excluding bidi” to 45 per cent, from the existing 65 per cent, stating that it was “expedient to do so in public interest”.

The VAT on pan masala too has bee reduced to 35 per cent from 65 per cent. The existing 65 per cent VAT on bidis has been left unchanged.

The move has drawn severe criticism from all quarters, political and non political, with health associations and the opposition Congress hitting out the Vasundhara Raje-led BJP government.

Former Chief Minister of Rajasthan, Ashok Gahlot hit out at the government and said, "Recently the state government has reduced the tax on tobacco products by 20-30 per cent, that was ridiculous."

"It would be a disastrous step playing with the health of people who were addict to tobacco as they would use it more," the senior Congress leader said.

“It seems, the state government has joined the select group of BJP MPs, who said earlier this year that bidis and tobacco were not harmful,” he added.

He said it was surprising that every state was against the use of tobacco products but the BJP government in Rajasthan has announced reduction in tax on the same.

"According to WHO, 10 lakh people die of tobacco-related diseases in India annually, and the state government was going to favour that death toll as it appeared with the move," Gehlot added.

In December last year, WHO's South-East Asia Regional Office (SEARO) awarded the Vasundhara Raje government with the World No Tobacco Day award for its strict tax regime on tobacco.

“States like Rajasthan have taken significant steps to tax all tobacco products including bidis at 65 per cent (VAT). This has resulted in a concomitant increase in bidi prices in the state. In recognition of this initiative, WHO has conferred the World No Tobacco Day 2014 Award to the Government of Rajasthan,” the WHO had said in a statement issued last year.