Tobacco & Tobacco Products are a large contributor to the Government’s Tax Revenue. The tax revenue from tobacco products is more than Rs.76,000 crores annually.
Despite a small share of tobacco consumption, legal cigarettes contribute a very high proportion of the tobacco tax revenue as cigarettes bear the brunt of taxation in India.
Equitable tobacco taxation would optimize revenue collections from tobacco sector by preventing shift in consumption from revenue-efficient legal cigarettes to cheaper forms of tobacco consumption and to illegal tax-evaded cigarettes.
