CBIC: Tobacco May Face Over 40% GST + Additional Tax

The CBIC Chief indicated that tobacco and cigarettes may face additional taxation beyond the current 40% GST slab, citing public health concerns and the need to deter consumption. The proposal under consideration could include a surcharge or higher cess, aligning with global practices of imposing steep taxes on tobacco products. The move would significantly raise product costs, potentially reducing demand while boosting revenue. Industry experts warn of challenges such as illicit trade and smuggling if taxes rise excessively. However, public health advocates argue that higher taxation is an effective deterrent, reducing smoking prevalence. The discussion reflects the government’s dual objective of revenue generation and promoting health policy goals.