Uttar Pradesh, Karnataka and Maharashtra paid maximum tax for tobacco items

economictimes.indiatimes.com:

Uttar Pradesh, Karnataka and Maharashtra, the finance minister said today. The share of taxes (inclusive of GST, Compensation Cess, Basic Excise Duty, and National Calamity Contingent Duty) collected from tobacco and allied products and pan masala in the gross tax revenue (Revised Budget Estimates for FY 2022-23) for the financial year 2022-23 is around 2.39%, Nirmala Sitharaman told lawmakers in Rajya Sabha.

The share of taxes from these products in gross tax revenue for FY23 (revised estimates) in comparison to FY22 (actual) has increased by 0.1%, she added. Taxes collected from tobacco and allied products, similar to taxes collected from other sources, form part of the overall Gross Tax Revenues (GTR) of the Government of India and are used to fund all schemes and programmes of the Government, Sitharaman said.

While announcing the budget for this fiscal year that started April 1, India had raised National Calamity Contingent Duty (NCCD) on cigarettes by 16%. According to experts, taxation on tobacco can be a very effective tool to generate revenue because the product being elastic in nature, high tax will have no adverse impact on revenue earnings of the government.

India is among 182 countries which signed the WHO framework convention on tobacco control which recommends at least 75 per cent tax on retail price of all tobacco products. However, in India, tax on cigarettes is 52.7 per cent, 'bidis' 22 per cent and chewing tobacco 63.8 per cent.

According to Global Adult Tobacco Survey-India (GATS -2016-17), nearly 27 crore adults of 15 years age and above used tobacco in some form or the other. India is the second largest consumer and the third largest producer of tobacco.