Thursday, 20 July 2017

How Can Cigarette Butts Be Termed 'Biodegradable', Green Court Asks Government

The National Green Tribunal today slammed the Ministry of Environment and Forests (MoEF) for terming cigarette butts as 'biodegradable' and directed it to clarify its stand on the issue.

A bench headed by NGT Chairperson Justice Swatanter Kumar asked the MoEF to take clear instructions within a week regarding its stand on declaring cigarette and bidi butts "toxic waste".

"Butts of cigarette and bidi are hazardous in nature. How can you call them 'biodegradable'? You take clear instructions and inform us," the bench said.

The observation came after an advocate representing MoEF told the green panel that cigarette butts are 'biodegradable'. When the bench enquired as to how they have come to this conclusion, he said that the main counsel was busy before a Constitution bench in the Supreme Court and sought adjournment.

The bench, however, said, "Constitution bench or no Constitution bench, ask him (the lawyer) to be present before us."

The matter is fixed for next hearing on July 27.

The tribunal had earlier issued notices to the MoEF, Ministry of Health and Family Welfare and Central Pollution Control Board on a plea filed by by a doctors body seeking prohibition on consumption of tobacco in all public places and proper disposal of related waste.

Doctors for You, an NGO working towards cancer care, had moved the NGT praying that the Centre be directed to declare cigarette and bidi butts "toxic waste".

It had claimed that tobacco was causing major health problems and its "cultivation, processing, production and disposal was harming the ecology badly".

The plea had sought directions to prohibit consumption of tobacco in any form in all public places and ban the use of plastics for packing tobacco used in cigarettes.

"People should be allowed to smoke and chew (and spit) in only designated areas where norms for disposal of cigarette/ bidi butts and toxic saliva should be made. Such designated areas should be licensed and monitored jointly by the Ministry for Environment and Ministry of Health," it had said. According to the plea, cigarette butts are concentrated toxic waste dumps and their improper disposal causes environmental problems.

"Discarded cigarette/bidi butts are a form of non- biodegradable litter.... While India is working towards Swachh Bharat, nearly 100 billion non-biodegradable cigarette butts and one trillion bidi butts are getting disposed of into environment every year....

"Cigarette butts leach out toxic chemicals. The leachate (liquid that drains from a landfill) from cigarette butts is acutely toxic to representative marine and freshwater fish species," the plea had said.

Source: NDTV
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Wednesday, 19 July 2017

Tax burden on cigarettes to go up by Rs 4.8-7.9 per 10 sticks

The Goods and Services Tax (GST) Council on Monday decided to increase the cess on cigarettes to offset a reduced tax revenue from the product following the 1 July rollout of the indirect tax reform.

Accordingly, the tax burden on cigarettes will go up by Rs 4.8-7.9 per 10 sticks, depending on their length and whether or not they have filters. Finance minister Arun Jaitley, who briefed reporters after the GST Council meeting held via videoconferencing, said the increase in cigarette cess will benefit the exchequer by about Rs 5,000 crore a year.

“Each state specifically responded positively (to the proposal) and this change will be effected from midnight (of Tuesday),” said Jaitley.

The GST Council decided to meet on Monday, advancing its meeting scheduled for the first week of August, to address the issue. A statement issued after the GST Council meeting said the method of calibrating the GST compensation cess on cigarettes did not take into consideration the cascading of taxes that existed in the earlier regime, which has now disappeared, thus leading to a reduction in the tax burden on the item.

In the earlier indirect tax regime, state level value-added tax used to be levied on the commodity which included the excise duty, resulting in a tax on tax. In the GST regime, such anomalies have been removed.

“While any reduction in tax incidence on items of mass consumption would be welcome, the same would be unacceptable in case of demerit goods like cigarettes,” said the statement, explaining the rationale behind the move.

Pratik Jain, partner and leader of the indirect tax practice at PwC India, said that more than the tactical move to increase the cess, the GST Council meeting had shown its inclination and flexibility to take quick decisions.

“One would hope that a few other issues such as GST rates on existing car leases, ambit of registered trade mark for taxation of packed food products etc, are addressed in the next meeting,” said Jain.

The GST Council meeting on Monday was the first after the roll-out of the indirect tax reform a fortnight ago.

“So far, the functioning has been smooth. The central and state governments are addressing the queries being raised,” said Jaitley.

Prashant Deshpande, partner, Deloitte Haskins & Sells LLP, said implementation has so far been far smoother than anticipated, but the robustness of the information technology infrastructure supporting GST would be put to test at the time of filing of returns.

Vishal Raheja, senior consultant, Taxmann, a tax services provider, said the increase in cess will push up prices of cigarettes considerably. “The increased cess is in addition to the highest rate of GST i.e. 28% and ad valorem cess of 5%,” he noted.

Source: Livemint
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Tuesday, 18 July 2017

GST Council raises cess on cigarettes to fix anomaly under GST

The goods and services tax (GST) Council raised the cess on cigarettes Monday to address an anomaly under the new regime that had resulted in lower tax incidence than before. The move will raise the prices of cigarettes that had fallen under the GST regime, which rolled out July 1. 

Cigarette maker ITC had been the biggest gainer from the anomaly with its stock rising nearly 10% from end-June levels, more than double the rise in the broader market over this period. An ITC spokesperson said the company was studying the details of the move. The increase in cess ranges from `485 per 1,000 sticks for filter cigarettes of up to 65 mm length to `792 per 1,000 sticks for those of 70-75 mm. In the case of other filter cigarettes, the tariff will rise by 31%. The new rates took effect at midnight. 

Finance minister Arun Jaitley said the anomaly would have cost the government Rs 5,000 crore in tax and benefited companies in the sector. 

"GST Council meeting was called after an anomaly was detected in the compensation cess on cigarretes. Impact of the cascading was not factored in, which resulted in windfall gains for cigarette companies... This was not the intention of the GST Council," Jaitley said, adding that the council reviewed the cess on cigarettes and decided to increase it. The council met via videoconference. 

The weighted average value added tax (VAT) rate on cigarettes was 28.7% and in line with that, GST was kept at 28%. In addition, compensation cess was to be levied at 1.05 times the specific rate, or 5% extra, the specific excuse duty rates. 

"However, this method of calibrating the compensation cess did not take into consideration cascading of taxes (that is, in earlier regime, VAT being charged on value inclusive of the excise duty). As a result, the total tax incidence on cigarettes in GST regime has come down, as compared to the total tax in pre-GST regime," the finance ministry said in a statement. "While any reduction in tax incidence on items of mass consumption would be welcome, the same would be unacceptable in case of demerit goods like cigarettes." 

Source: The Hindu

The tax rate of 28% and ad valorem cess of 5% remains the same except in the case of other items falling in the cigarette category. 

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Saturday, 15 July 2017

Beware, smoking in pregnancy can lead to antisocial behaviour in child

Smoking during pregnancy is a no-no. Previous research has shown that it can harm the baby’s brain, change foetal DNA, and lead to childhood obesity. Earlier studies also found a link between smoking during pregnancy and antisocial behavior in children. However, whether this is a causal relationship remains unclear. In order to gain a better understanding, a team of researchers from Brown University and the University of Maryland looked at 3,443 children of women who took part in the Boston and Providence centers of the Collaborative Perinatal Project (CPP) between 1959 and 1966.

The CPP looked at factors during pregnancy and birth that might influence mental, neurological, and physical capabilities of a child, including smoking habits. The team gathered this data, as well as information from court records on the children between 18 and 33 years of age to assess if any crimes had been committed during this time. The team also interviewed 1684 adults with an average age of 39 whose mothers had taken part in the CPP, asking them about their behaviour as a teen and as an adult.

The behaviour was then compared to diagnostic criteria for conduct disorder in juveniles and antisocial personality disorder in adults. The results showed that 59% of women reported any smoking during pregnancy and many reported smoking heavily, with 33.8% smoking a pack or more per day. The team found that for each pack of cigarettes smoked by the mothers per day, there was an additional 30% increase in the chance of children exhibiting three or more symptoms of conduct disorder as a juvenile and more than three times the chance of showing three or more symptoms of antisocial personality disorder as an adult.

Children of mothers who smoked while pregnant also had more than double the chance of having a record of non-violent offences as a juvenile and of committing a violent offence as an adult. The findings were independent of other factors such as a history of mental illness and low educational attainment/income, leading researchers to suggest that smoking while pregnant may have a small to moderate causal effect on the risk of antisocial behavior in the offspring.

“Many important risk factors for [antisocial behaviour] are not modifiable (eg. sex, family history), but maternal smoking in pregnancy is potentially modifiable, and remains prevalent among particular subgroups of women, including teenage mothers and mothers with less than a high school education,” explained the team.

“Although maternal smoking in pregnancy may result in only slight to moderate increases in an offspring’s risk of antisocial behaviour, removing this exposure may have substantial impacts at the population level.” The findings can be found published online in the Journal of Epidemiology & Community Health.

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Thursday, 13 July 2017

Cigs cheaper under GST

Contrary to popular perception among smokers that cigarettes and other tobacco products would be dearer under the Goods and Services Tax (GST) regime, prices of these products have actually fallen by 7-9%.

The central government issued the notification regarding GST on cigarettes and other tobacco products on July 1, the day the new tax regime came into force. "The clarity on excise duty and other duties has come through after the issuance of the notification," said Deepak Mishra, anti-tobacco campaigner and executive director of Socio-Economic and Educational Development Society (SEEDS).

He added as per the new notification, basic excise duty (BED) and additional excise duty (AED) would not be levied on cigarettes. "Hence the effective taxes on cigarettes of various sizes have declined by 7-9% under the GST," Mishra said, adding the increasing demand for a higher tax on tobacco products in line with the World Health Organisation (WHO) prescriptions has been belied.

Mishra said the notification issued on July 1 has exempted cigarettes from BED and AED. Since there was no notification on national calamity contingent duty (NCCD), it has been assumed that it would continue in the GST regime.

"Cigarettes will be subject to 28% GST, ad valorem cess of 5%, specific cess and NCCD. This means that if retail prices are unchanged, tax per stick of cigarette will reduce by 7-9%," Mishra said.

"The GST regime has been benign towards the smokers of cigarette and 'bidi'. In the country, the cigarette smokers account for 11% of total tobacco consumers, and the remaining 89% belongs to the category of people who smoke 'bidi' and those who chew tobacco. The biggest share (80%) of revenue that the government gets is from the sale of cigarettes," Mishra added.

Mishra said effective low taxation on cigarette and other tobacco items under GST was in sync with the overall trend of decrease in tax on cigarettes for the last three fiscals, beginning with 13% in 2015-16, 10% in 2016-17 and 6% in 2017-18. Prior to this, the annual tax increase on cigarettes was 20%.

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Wednesday, 12 July 2017

Passive smoke raising risk of heart disease among students

More than 50% of higher secondary school students in Ernakulam district who took part in a survey admitted that they were exposed to second-hand smoke at home, schools, and public places.

The students were unable to escape passive smoke and almost 15.2% of them have chronic respiratory disease, according to the survey.

This is despite several government initiatives, including legislation, to reduce smoking. Though the Kochi corporation has started a drive to make Kochi smoking-free people, including school children, continue to be exposed to second-hand smoking making them vulnerable to respiratory infections, ischemic heart diseases, lung cancer and asthma.

According to the study, "Prevalence of exposure to second-hand smoke among higher secondary school students in Ernakulam district," published in the Journal of Pharmacy and BioAllied Sciences in 2017, a majority of students (56 %) admitted that they were exposed to cigarette smoking in the past one week in public spaces and 10.2 % in closed public places. While 23.2 % students were exposed to second-hand smoke from a family member, another 18.8 % they encountered tobacco smoke when their friends smoked.

"Non-smokers who are exposed to second-hand smoke have an increased risk of developing heart diseases at least by 25%, stroke by 20%, and lung cancer by 20%," said Dr PS Rakesh, department of community medicine, AIMS and author of the study.

The prevalence of chronic respiratory disease was 15.2% among children who said they were exposed to second-hand smoke while it was just about 8.16% among the students in the other group. Students exposed to smoke were found to have 2.16 times higher probability of getting a chronic respiratory disease. The survey was conducted randomly among higher secondary school children to help know the effects of recent tobacco control interventions and to plan further strategies.

"The current study points out that despite many efforts by government and in spite of its high literacy and better health-care systems, tobacco problem still exists in the community. The survey points to the inadequate enforcement of smoking ban in the public places in the state," said Dr Rakesh.

He added that reducing exposure to second-hand smoke among school children requires interventions to decrease tobacco use initiation, to promote tobacco cessation and to control smoking in public places.

Source: Times of India
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Friday, 7 July 2017

Rs 19,293 crore tax collected on tobacco in 2016-17 January

Over Rs 19,000 crores have been collected as Central tax on tobacco till January in financial year 2016-17, the government said today. “As reported by the Finance Ministry, the total amount of Central tax collected on tobacco during 2016-17 (till January) is Rs 19,293 crores. The figure for 2014-15 and 2015-16 stand at Rs 22,174 crores and Rs 19,977 crores, respectively,”

Union Health Minister J P Nadda said in a written reply in Rajya Sabha. He said there was no earmarking of funds to the health care sector out of the funds collected from taxes on tobacco.

Replying to another question, Minister of State for Health, Anupriya Patel said that as per the report on tobacco control in India, published in 2004, India is the second largest consumer of unmanufactured tobacco in the world and about 8-9 lakh Indians die of tobacco-related diseases every year. 

“As per the report of ‘Global Adult Tobacco Survey (GATS) India 2009-10, more than one third (35 per cent) of adults in the age group of 15 years and above use tobacco in some form or the other, whereas 33 per cent adult males and 18 per cent adult females in the country consume smokeless tobacco products,” she said.

Anupriya said as per the Global Youth Tobacco Survey 2006, 14.1 per cent of students aged 13-15 years in India use any tobacco product, 4.2 per cent smoke cigarettes and 11.9 per cent use other tobacco products.

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Tuesday, 4 July 2017

GST impact on cigarettes, bidi, chewing tobacco: How smoking will affect your wallet; find out here

GST impact on cigarettes, bidi, chewing tobacco: The tobacco industry is booming, as is clear if we see the balance sheet of ITC. Many reports have been released by WHO claiming that India is harboring the world’s highest incidence of mouth cancer. We are the second largest consumer of tobacco, having an astonishing 275 million users! But how will GST affect this multi-million dollar industry? In the past decade, excise duty rates have been revised for cigarettes and other tobacco products, but locally-manufactured bidi was exempted. GST tax rate on tobacco and tobacco-related products was declared on 18th May by the GST council. Now let us see the impact of GST rates on the tobacco industry in India.

Impact of GST Rate on the Tobacco Industry
Excise duty is charged on the manufacturing of cigarettes, bidi, and other chewing tobacco products at different rates.

Cigarette – 64%
Bidi – 22%
Chewing products – 81%

A lot of revenue is generated from the sale of tobacco for the Indian government, although the tax burden levied on the Indian tobacco industry is not enough, as per the recommendation of WHO, for a tax burden of 75% on all tobacco-related products. There has been an increasing demand for a higher tax burden on the tobacco manufacturers.

Under GST, there will be an additional cess charged on the tobacco-related products, over and above the GST charged at the rate of 28%.
Let’s Understand the Pricing of 1 Cigarette Under GST With an Example
ITC manufactures cigarette, chewing tobacco, and pan masala.

ParticularsCigarettes under 65mmCigarettes between 65mm to 70mmCigarettes between 70mm and 75mmCigarettes above 75mmPan masalaPan masala with gutkha (tobacco)
Value per unit (A)Rs 5Rs 10Rs 15Rs 15Rs 5Rs 10
Probable maximum cess
of the value of goods or transactions. (B)
  Rs 0.25 (5%)Rs 0.50 (5%)Rs 0.75 (5%)Rs 0.75 (5%)Rs 3 (60%)Rs 20.40
Probable cess per 1000 sticks (C)Rs 1.591Rs 2.876
(non-filter) and
Rs 2.126
Rs 2.876
(both filter and non-filter)
Rs 4.170
(both filter and non- filter)
Not applicableNot applicable
GST rate @28% (D)Rs 1.40Rs 2.80Rs 4.20Rs 4.20Rs 1.40Rs 2.80
Probable price that can be charged on products (A + B+C+D)Rs 8.016Rs 16.176 (non-filter)
Rs 15.426(filter)
Rs 21.502 (both filter and non-filter)Rs 24.12Rs 9.40Rs 33.20
Cigars and cigarillos will be charged at the rate of 28% and an additional cess up to 21% or Rs 4.170 per stick would be levied. Chewing tobacco has also been kept under the 28% category and an additional cess of 142% would be levied upon chewing tobacco (with lime tube) and 160% on chewing tobacco (without lime tube).

Impact on the tobacco industry is going to be largely neutral since the 5% cess declared by the Indian government was less than the expected rate by the tobacco industry. There will be an increase in the expense of smokers due to the rise in the price of cigarettes in the initial period, although it is expected that irrespective of the tax rate, there will be neutral impact on the tobacco industry due to the implementation of GST.

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Friday, 23 June 2017

India slashes tobacco consumption in a major public health win

India recently reported a sharp decrease in tobacco consumption, a major public health victory. According to the Global Adult Tobacco Survey (GATS) India 2016-17, 81 lakh fewer Indians now use tobacco compared to 2009-10. This represents a 17 percent relative reduction in tobacco consumption across all age groups and a 60 percent relative dip in tobacco use among minors (aged 15-17). The age of initiation for both smokeless and smoking tobacco in the country has also increased by a year. The decrease is important because tobacco is the leading contributor to heart disease, cancers, chronic respiratory diseases and diabetes, which are responsible for 43 percent of all deaths in India. India’s tobacco control policies, which have focused on prevention and decreasing initiation, appear to be working.

Major tobacco control measures
Over the past several years, India has taken a series of measures to control the tobacco-related epidemic. In 2011, gutka, a form of chewable tobacco that is one the biggest cause of oral cancers, was banned by the Government of India and subsequently by various states. The ban was ambitious and faced a severe backlash from the influential gutka industry in the country.

The results are impressive. Smokeless tobacco use has dropped from 25.9 percent in 2010 to 21.4 percent in 2017. The impact on oral cancer, a leading cause of cancer in India is expected to be profound but it is too early to tell.

India’s second big win came in the face of combined resistance from the smoking and smokeless tobacco industry: increasing the size of pictorial health warnings on tobacco products. In the face of industry pressure for less graphic warnings, India signed on for warnings that cover 85 per cent of packaging on all tobacco products in 2015. These efforts appear to be working. According the latest evidence, more than 60 percent of cigarette smokers, 53 percent of bidi smokers, and 46 percent of smokeless tobacco users attribute their desire to quit tobacco to pictorial warnings.

The third important measure was the increased taxation (in the form of value added tax or VAT) on tobacco products across states over the last six years. Almost two-thirds of tobacco users in India smoke bidis, which was taxed at a rate between 12 per cent to 65 percent depending on the state. The central government has proposed to tax all tobacco products at the highest bracket of 28 percent under the new Goods and Services Tax (GST).

Road ahead
Tobacco-related diseases cost the country more than one lakh crores a year (2011 estimates) and more needs to be done to improve on India’s performance over the last decade. The implementation of the Cigarettes and Other Tobacco Products Act (COTPA), which restricts the sale of tobacco to minors, point-of-sale advertising, surrogate advertising should be strengthened. 

India should also curb the other variants of smokeless tobacco such as khaini and paan masala, which have been banned in some states. Implementation of the ban on smoking in public places must also be enforced, as evidence shows minimal change in second hand smoke exposure at workplaces.

Cessation services should be made more widely available. Despite the National Tobacco Control Program being enumerated in the last two five-year plans, little progress has been made. Latest evidence shows that thanks to various awareness measures taken by the government, about half of all smokers and smokeless tobacco users now have the desire to quit tobacco use (an increase of approx. 9 percent and 4 percent, respectively, since 2010). This demand needs to be met with counselling and pharmacotherapy services. Without effective and operational cessation services made available down to the sub-district level, the gains cannot be sustained. Funding, capacity building and integrated health services are the need of the hour.

The question of alternative livelihoods for tobacco farmers and bidi rollers in the country also needs to be addressed. The Indian Tobacco Board had for many years, rolled out subsidies and incentives that encourage tobacco cultivation in the country, conflicting with India’s obligations under the WHO Framework Convention for Tobacco Control (FCTC). Despite growing evidence of the demand for viable alternatives, efforts in the direction have been countered by the tobacco industry, with a pretext of saving livelihoods. Efforts are now being made to phase out the current subsidies and support farmers for growing alternative crops.

The COTPA should also be made more progressive, for example, to increase the legal smoking age to 21 years from 18 years, as has been done for alcohol consumption in many states.

Tobacco control involves multi-sectoral commitment and action and is therefore a challenge for developing countries to implement. There are few investments that India could make that match the returns on tobacco control. Millions of lives are at stake.

Source: ETHealthworld
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