{"id":31953,"date":"2018-10-29T11:58:47","date_gmt":"2018-10-29T06:28:47","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=31953"},"modified":"2018-10-29T11:58:47","modified_gmt":"2018-10-29T06:28:47","slug":"the-price-prescription","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-price-prescription\/","title":{"rendered":"The price prescription"},"content":{"rendered":"<p><a style=\"font-size: 1rem;\" href=\"http:\/\/www.thehindu.com\/opinion\/op-ed\/the-price-prescription-taxation-and-policy-on-tobacco\/article22458281.ece\"><strong>The price prescription<\/strong><\/a><\/p>\n<p><strong>Context<\/strong><\/p>\n<p>Post-GST, we need a more targeted taxation and retail policy on tobacco products<\/p>\n<p><strong>What<\/strong><\/p>\n<p>India is the second largest consumer and producer of tobacco-based products \u2014 categorised as sin goods or demerit goods \u2014 and it has become imperative for policymakers to devise measures to effectively curb their use.<\/p>\n<p><strong>Health comes first<\/strong><\/p>\n<ul>\n<li>The Supreme Court recently stayed a Karnataka High Court order setting aside the 2014 amendment rules to the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 that prescribed tobacco packages having pictorial warnings covering 85% of the package space<\/li>\n<li>The Supreme Court observed that the \u201chealth of a citizen has primacy\u201d<\/li>\n<\/ul>\n<p><strong>A skewed pattern<\/strong><\/p>\n<p>The World Health Organisation\u2019s Global Adult Tobacco Survey (GATS 2016-17) highlights India\u2019s distinct pattern of tobacco consumption in multiple forms:<\/p>\n<ul>\n<li>In India, bidis, chewing tobacco and khaini form 89% of consumption as against 11% for cigarettes.<\/li>\n<\/ul>\n<p><strong>Question arises<\/strong><\/p>\n<p>What explains such a skewed pattern?<\/p>\n<p><strong>Due to Unit level pricing<\/strong><\/p>\n<ul>\n<li>If we look at the competitive dynamics and pricing, a key reason for such disparity is because it is based on the unit-level pricing of multiple forms of tobacco. The average unit price of a bidi or smokeless tobacco is significantly lower than of a cigarette<\/li>\n<li>Therefore, the former is a cheaper source for consumers who are mostly from the low-income segment of society.<\/li>\n<\/ul>\n<p><strong>After GST<\/strong><\/p>\n<p>The nationwide implementation of the goods and services tax (GST) has not improved the situation either<\/p>\n<p>All tobacco-related products have been placed in the 28% tax slab<\/p>\n<p><strong>NCCD<\/strong><\/p>\n<p>Additionally, a National Calamity Contingent Duty (NCCD) and a cess charge have been imposed on cigarettes and smokeless tobacco<\/p>\n<p><strong>Not much effect of the GST<\/strong><\/p>\n<ul>\n<li>The GST roll-out has not had much of an impact either on the pricing of various tobacco products or in reduction of the vast disparity between its different variants<\/li>\n<li>The impact has been negligible in the case of bidis.<\/li>\n<\/ul>\n<p><strong>Way forward<\/strong><\/p>\n<ul>\n<li>The revisions in the taxation policy concerning tobacco products should ideally have a mix: of a removal of all excise and other tax exemptions irrespective of the size of the unit, restrictions on sales of loose sticks and raising taxes\/duties on bidis and smokeless tobacco by a significantly higher level to narrow the gap between the price of bidis and smokeless tobacco\u00a0<em>vis-\u00e0-vis<\/em>\u00a0cigarettes keeping in mind the increased probability of health-related issues among low-income poor households and the health-care burden.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The price prescription Context Post-GST, we need a more targeted taxation and retail policy on tobacco products What India is the second largest consumer and producer of tobacco-based products \u2014 categorised as sin goods or demerit goods \u2014 and it has become imperative for policymakers to devise measures to effectively curb their use. Health comes&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/the-price-prescription\/\">Continue reading <span class=\"screen-reader-text\">The price prescription<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-31953","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704788611},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/31953","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=31953"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/31953\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=31953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=31953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=31953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}