Tax revenue from cigarettes in India FY 2011-2020
The tax revenue from cigarettes across India in fiscal year 2020 was approximately 356 billion Indian rupees, an increase from previous fiscal years. Most of the tax revenue from tobacco comes from the sale of legal cigarettes from the organized market.
Regulating tobacco products
Taxation of tobacco products varies based on products - cigarettes are more expensive than bidis. The Indian government had increased excise duty on cigarettes and other tobacco products over the years, while the sale and use of e-cigarettes was banned in September 2019. Taxation was meant to make tobacco products less affordable, unfortunately this has not influenced consumption as tobacco taxes are not regularly adjusted for inflation.
State-owned companies
The state-owned company, Life Insurance Corporation had a 28 percent stake in ITC. The share prices of India's largest tobacco company, ITC fell considerably following a proposed tax hike on cigarettes by the central government in fiscal year 2020. The government also received tobacco related revenue from prosecutions for smoking while driving. For instance, the Delhi traffic police had prosecuted nearly four thousand cases in 2018.
Regulating tobacco products
Taxation of tobacco products varies based on products - cigarettes are more expensive than bidis. The Indian government had increased excise duty on cigarettes and other tobacco products over the years, while the sale and use of e-cigarettes was banned in September 2019. Taxation was meant to make tobacco products less affordable, unfortunately this has not influenced consumption as tobacco taxes are not regularly adjusted for inflation.
State-owned companies
The state-owned company, Life Insurance Corporation had a 28 percent stake in ITC. The share prices of India's largest tobacco company, ITC fell considerably following a proposed tax hike on cigarettes by the central government in fiscal year 2020. The government also received tobacco related revenue from prosecutions for smoking while driving. For instance, the Delhi traffic police had prosecuted nearly four thousand cases in 2018.
