Lok Sabha Question No. 2774 (UNSTARRED), answered on 2023-08-07
Subject: Lowest Price of Tobacco Products
Ministry: FINANCE
Asked by: Unmesh Bhaiyyasaheb Patil, Sujay Radhakrishna Vikhepatil, Krishna Pal Singh Yadav, Heena Vijaykumar Gavit, Shrikant Eknath Shinde, Rita Bahuguna Joshi

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA

## UNSTARRED QUESTION NO.2774

## TO BE ANSWERED ON MONDAY, AUGUST 7, 2023/SRAVANA 16, 1945 (SAKA)

## LOWEST PRICE OF TOBACCO PRODUCTS

2774.    SHRI UNMESH BHAIYYASAHEB PATIL:

DR. SUJAY RADHAKRISHNA VIKHE PATIL:

DR. KRISHNA PAL SINGH YADAV:

DR. HEENA VIJAYKUMAR GAVIT:

DR. SHRIKANT EKNATH SHINDE:

PROF. RITA BAHUGUNA JOSHI:

## Will the Minister of FINANCE be pleased to state:

(a) whether India has one of the lowest prices for tobacco products and there is a need to increase taxes on tobacco products to utilize the additional revenue gained for cancer prevention and awareness, if so, the details thereof;

(b) the details of the current tax burden on beedi, cigarette and smokeless tobacco products in India;

(c) whether the Government has received any recommendations from any States to increase Compensation Cess on tobacco products; and

(d) if so, the details thereof?

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## ANSWER (SHRI PANKAJ CHAUDHARY)

(a): No such data is available with the government.Government has been reviewing and recalibrating the  duty  rates  on  tobacco  products  from  time  to  time.  In  Union  Budget  2023-24,  the  rate  of  National Calamity  Contingent  Duty  (NCCD),levied  as  a  duty  of  excise,  has  been  increased  by  about  16%  on specified cigarettes.

(b): Tobacco products such as cigarettes, chewing tobacco, gutkha, etc. attract GST, Compensation Cess,  Basic  Excise  Duty  and  National  Calamity  Contingent  Duty  (NCCD),  while  Beedis  attract  GST, Basic Excise Duty and National Calamity Contingent Duty (NCCD) as per the details in the Table below:

| Tax/Duty/Cess     | Details                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| GST               | Tobacco products such as beedis, cigarettes, chewing tobacco, gutkha, etc. attract GST at the highest rate of 28%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Compensation Cess | Compensation Cess is leviable on specified tobacco products such as chewing tobacco, gutkha, etc., other than with declared retail sale price, cigarettes, among others, at varying ad valorem rate ranging from 5% to 290% and/or specific rate, on products like cigars, cigarettes, etc. ranging from Rs. 2076 per thousand to Rs. 4170 per thousand. Further, the Compensation Cess rate levied on specified commodities like gutkha, chewing tobacco, smoking mixtures for pipes and cigarettes, etc., with declared retail sale price, has been linked to retail sale price and is leviable at a rate ranging from 8% to 69% of retail sale price. |

| Basic Excise Duty                        | Basic Excise Duty is leviable on specified tobacco products such as beedis, cigarettes, chewing tobacco, gutkha, etc. at varying ad valorem rate ranging from 0.5% to 1% or specific rate ranging from 5 paisa per thousand to Rs. 10 per thousand.                      |
|------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| National Calamity Contingent Duty (NCCD) | National Calamity Contingent Duty (NCCD) is leviable on specified tobacco products such as beedis, cigarettes, chewing tobacco, gutkha, etc. at varying ad valorem rate ranging from 25% to 60% or specific rate ranging from Rs. 1 per thousand to Rs. 850 per thousand |

(c) and (d): In the recent past, representations have been forwarded by States of Punjab, Chhattisgarh and  Haryana,  wherein  it  has  been  proposed  to  increase  the  applicable  rate  of  Compensation  Cess  on tobacco products like cigarettes and smokeless tobacco products.

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