A Standing Committee of Parliament has recommended a ban on the sale of loose cigarettes to curb the use and sale of tobacco products.
According to reports, the government may announce the ban ahead of the Union Budget 2023-24, which is likely to be unveiled by Finance Minister Nirmala Sitharaman on February 1, 2023.
The committee argued that the sale of single cigarettes is a hindrance in reducing the use of tobacco products, which cause over 3.5 lakh deaths in India annually.
The government already levies the highest GST tax rate of 28% on cigarettes, along with a compensation cess and excise duty of up to 290% on basis on value along with specific rates for products like. The collective tax on cigarettes goes upto 64%.
Even the high tax does not deter smokers. The committee is of the opinion that merely raising tax rate is not enough to fight the use and sale of tobacco products. The World Health Organisation (WHO), which raised an alarm on the massive increase in cases of mouth cancer in the country, asked the Indian government to raise tax on cigarettes to 75%.
The committee also recommended doing away with smoking zones at all airports, said reports. It is to be recalled that the government banned the sale and use of e-cigarettes in 2019 on the recommendation of Health Ministry.
Analysts view any potential ban on sale of loose cigarettes as a positive for the tobacco industry as users will be forced to buy packets from payers like players like Godfrey Philips India, ITC, VST Industries.
On Monday, shares of Godfrey Philips, a cigarette maker, hit a 52-year-high, ending 2.87% higher at Rs 2,009.00 on Monday. Stocks of VST Industries and ITC gained 1.65% and 0.54% during the day.
