Tobacco & Tobacco Products are a large contributor to the Government’s Tax Revenue. The total tax revenue collected from tobacco products is more than Rs. 43,000 crores annually.
Cigarettes which bear the brunt of taxation in India are the major revenue contributor from the Tobacco sector.
Source: Cigarette Taxes paid by our member companies (representing >98% of the Industry) and estimates for others
Despite just 9% share of tobacco consumption, legal cigarettes contribute 80% of tax revenue.
Source: Tax Revenue – Actuals for Cigarette Industry and estimates for others; Tobacco Consumption – FAO; Tobacco Board
Note: Other Tobacco Products includes illegal Cigarettes
Stability and moderation in cigarette taxation would optimize revenue collections from tobacco sector by preventing shift in consumption from revenue-efficient legal cigarettes to cheaper, low quality and revenue inefficient forms of tobacco consumption and to illegal tax-evaded cigarettes.