Insights : Put tobacco under 28% GST slab: Exploited 'bidi' workers to Modi govt

Aiming to minimise tobacco-related deaths, bidi workers and health activists on Tuesday urged the government to put bidis under the 28 per cent tax slab of the proposed Goods and Services Tax (GST) regime.

The bidi workers have also urged the government to intervene and alleviate their working conditions and eventually seek out alternative livelihood options.

The workers have accused the bidi company owners of taking subsidies in the name of poor workers like them.

"We ourselves are the victims of the bidi industry owners. They take advantage of us and manipulate the weak enforcement and regulatory system in the bidi industry to make our lives more miserable.

"We do not want you (government) to consider their request for lower taxes, benefits or subsidies that they are seeking in our name," said Thangam, a 45-year bidi worker from Tamil Nadu in a letter written to the finance and health ministries.

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Over one million deaths in India every year are tobacco related and almost two-thirds of tobacco consumers in India actually consume bidis, leading to debilitating diseases and eventual death.
According to Rijo John, Economist and Health Policy Analyst, the bidi consumption in India is price elastic and hence responds negatively to changes in prices.

"This is why a change in tax slabs could make a significant change in consumption and hence all the more reason why the government and the GST Council should not let this opportunity go to leverage the instrument of taxation to discourage bidi consumption -- a stated public policy goal," said John.
John said that a 28 per cent GST on bidis would only barely surpass the current tax burden on bidis in India. Hence, settling for a GST rate less than 28 per cent on bidis will result in a public health disaster in India as bidis are the most commonly used form of tobacco in the country.

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According to the Voluntary Health Association of India (VHAI), for the majority of India's 275 million tobacco users, not categorising bidis in the highest GST rate slab will only accelerate the death and diseases caused by tobacco and work against the goals stated in the government's recently announced national health policy.

Source : http://www.business-standard.com/article/economy-policy/put-tobacco-under-28-gst-slab-exploited-bidi-workers-to-modi-govt-117053001984_1.html