India raises tax on cigarettes

Indian labourers use a combination of chewing tobacco and tendu leaves to make handrolled 'beedi' cigarettes at a workshop in Nizamabad, some 167 kms north of Hyderabad, on July 17, 2017. Nearly 250,000 beedi workers are employed in the Nizamabad and Kamareddy districts, many of whom are women living below the poverty line. The beedi rolling industry forms parts of an informal economy which workers worry will be negatively impacted by the imposition of the new Goods and Services Tax (GST), which levies a 28% tax on beedi cigarettes. / AFP PHOTO / NOAH SEELAM

NEW DELHI: India has raised the total tax on cigarettes resulting in an increase of as much as 792 rupees (US$12.31 or RM52.79) for every 1,000 cigarettes, adding about 50 billion rupees (US$777mil or RM3.33bil) in revenues for the government, finance minister Arun Jaitley said.

The higher rate will be effective from July 18, Jaitley told reporters in New Delhi on Monday.

The new tax rate is part of a new goods and service tax (GST) unveiled on July 1 in the country’s biggest tax reform in the 70 years since independence.

After GST was rolled out, cigarettes initially became cheaper because the total tax burden had come down by about 6%-7%. The tax was increased after an uproar from anti-tobacco and several health groups. - Reuters