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Levy additional compensation cess on tobacco products: public health experts

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Karnataka: On the backdrop of GST Council’s 41st meeting to discuss on ‘Compensation to States’, Public Health Experts and Economists are urging the council to increase the ‘compensation cess’ on all Tobacco products. The GST Council is scheduled to meet on August 27th, 2020.
It should be noted that ‘Compensation Cess’ was introduced as a relief to the States for the loss in tax revenue arising from the GST implementation. Amid Coronavirus pandemic, due to poor economic activity the ‘Compensation Cess’ collection has taken a severe beating.
Economist and Health Policy Analyst Dr Rijo John, said
“Coronavirus pandemic has impacted the economy of the country in such a way that it will need unprecedented financial resources to recover from the shock. Levying additional compensation cess on all tobacco products will help boost the economy.”

He suggested that just by levying an additional ‘Compensation Cess’ of Rs 1 per stick of bidis, Rs 5 per stick of Cigarettes and 52 percent increase on smokeless tobacco products, an additional tax revenue to the tune of Rs. 50,000 crores can be mopped up.

Dr S Venkatesh, Senior Cardiologist, Aster RV Hospital who is also an Anti-tobacco Advocate said– “Levying compensation cess on sin products like cigarettes, bidis and other tobacco products at a time when the state is fighting COVID-19 is very much needed as the move will make the Tobacco products ‘unaffordable’. Also, it curbs the virus spread as tobacco users with compromised immunity are at greater risk when confronted with COVID-19”.

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