Table 2

Impact of the GST on tobacco products in India

Baseline (pre-GST)
FY 2017–2018
Current system
GST+NCCD +cess
FY 2017–2018
Cigarettes
 Retail price (pack of 10)87.3687.52
 Total tax burden52.64%52.78%
 Consumption (billion sticks)83.1082.87
 Total tax revenue (INR billion)382.14382.79
   VAT/GST (INR billion)174.0598.59
   Excise/NCCD (INR billion)208.099.63
  Compensation cess (INR billion)0.00274.57
 Percentage change from the benchmark
   Price0.18%
   Consumption−0.28%
   Revenue0.17%
Bidi
 Retail price (pack of 25)15.0016.32
 Total tax burden15.96%22.03%
 Consumption (billion sticks)260.00233.81
 Total tax revenue (INR billion)24.9033.62
   VAT/GST (INR billion)20.6433.38
   Excise/NCCD (INR billion)4.260.24
 Percentage change from the benchmark
   Price8.78%
   Consumption−10.07%
   Revenue35.01%
Smokeless Tobacco
 Retail price (pouch of 10 g)11.5012.20
 Total tax burden57.12%59.96%
 Consumption (billion 10 g pouches)11.4410.75
 Total tax revenue (INR billion)75.1478.65
   VAT/GST (INR billion)31.0915.83
   Excise/NCCD (INR billion)44.064.02
   Compensation cess (INR billion)58.80
 Percentage change from the benchmark
   Price6.07%
   Consumption−6.01%
   Revenue4.66%
  • Calculations use a retail margin of 10% and an average price elasticity of −0.35,–0.91, −0.88 for cigarettes, bidi and SLT, respectively. Results are weighted averages based on state consumption shares for bidi and cigarettes, and prevalence shares for SLT. US$1≈INR 68.

  • GST, goods and services tax; INR, Indian rupee; NCCD, National Calamity Contingent Duty; SLT, smokeless tobacco; VAT, value-added tax.