Tobacco Tax Explained: Big decision of the Government of India! States will get a big share from tobacco tax..; Sitharaman’s big revelation

• Bill introduced to increase excise duty on tobacco products
• Allegations of misuse of GST cess rejected
• Cigarettes will be expensive, but the benefits of the states will be doubled

Tobacco Tax Explained: The Union government recently introduced a bill in the Lok Sabha to impose excise duty on tobacco products which was passed. This is not a new law or additional tax. Also, this excise duty on tobacco will be shared with the states, which will also benefit the states. like that Finance Minister Nirmala Sitharaman explained. Also, the Finance Minister clarified that the excise duty imposed on tobacco products will be shared among the states as per the recommendations of the Finance Commission. This will also compensate the revenue loss to the states after the implementation of GST. The Central Government always considers the interests of the States and ensures that no State gets resources less than the amount decided by the Commission.

A comprehensive plan is being drawn up to benefit the states. Finance Minister Nirmala Sitharaman responded to the debate on the Central Excise Bill on Tobacco Products in the Lok Sabha on Wednesday. He refuted the allegations of several MPs and clarified that the government is not imposing new taxes but imposing excise duties that existed before GST.

Also Read: Ayushman Bharat Yojana: No need to sell house if sick; How to get Ayushman Bharat Yojana? Read more to know

When the tobacco tax bill was introduced, the opposition rioted. At the time, Sitharaman also denied allegations that the central government was using the GST compensation cess to pay off debt. He said that the compensation cess was actually levied to compensate states for revenue losses incurred during the Covid-19 pandemic, as well as to repay loans taken.

Also Read: Rupee vs Dollar: Rupee collapses, dollar breaks all records! What are the exact reasons for this bad situation in the international market?

As per the amendments to the Central Excise Act, the central government has proposed to levy excise duty ranging from Rs 2,700 to Rs 11,000 per 1000 sticks on various categories of cigarettes. Similarly, various tobacco uses are taxed at 60%-70%, while chewing tobacco is taxed at 100% per kg. Citing the World Health Organization, the Finance Minister said that since the introduction of GST, the cess rates on cigarettes have remained unchanged for eight years, while earlier rates were increased every year to discourage tobacco use. The levy will now be used to stabilize the affordability of tobacco products.