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With GST, kicking the butt just got harder

Anti-nicotine products, used in deaddiction, are taxed at 18%


Kicking the butt was never easy, and the Goods and Service Tax (GST) does not make it any easier.

Whereas cigarettes face a ‘sin tax’ of 28 per cent and cess, Nicotine Replacement Therapy (NRT) products attract 18 per cent tax.

Among NRT products, nicotine gum is the most popular, in addition to nicotine patches, lozenges, and oral strips. Prior to the GST, the total tax on these products stood at 11.3 per cent — 6 per cent Central Excise and 5.3 per cent weighted average of the Value-added Tax (VAT).

Experts feel that if the GST is lowered to 5 per cent, prices could be reduced by up to 7 per cent. Nicotine gums sell for 6 a piece, while a nicotine patch of seven pieces is 3,000.

Cipla Health is the market leader for NRT products, and other big players include ITC, Strides, Glenmark, Inventz, Rusan Pharma, and so on.

PC Gupta, Director of Healis Sekhsaria Foundation of Public Health, says NRT products, which are available on prescription from doctors and are coupled with counselling, should be taxed at minimum rates.

“In randomised control trials of those subjects put on prescription-based therapy, versus others who were given placebos — they were told that they had been given drugs, which actually had no medicinal value — the former group recorded a 100 per cent chance of tobacco cessation,” said Gupta. “So we realise that prescription-based products are working.”

Gupta said these products help alleviate withdrawal symptoms, and addicts can be weaned away from tobacco if the de-addiction course is completed.

“Therefore, prescription-based NRT products should be taxed at lower rates. They are helpful in saving lives,” he said, adding that apart from nicotine gums and patches, there are non-nicotine-based de-addiction drugs too, such as Bupropion and Varenicline which are used as smoking cessation aids. However, the non-nicotine drugs are not very popular.

Jagannath P, ex-consultant for the National Tobacco Control Programme, Karnataka, said most people could not afford NRT products.

The World Health Organisation (WHO) recommends NRT as the first line of treatment to quit smoking or use of smokeless tobacco products. According to a survey conducted in 2016-17, 55 per cent of smokers and 50 per cent smokeless tobacco users plan to quit tobacco, highlighting the demand for products and services that can help them in their efforts.

Interestingly, medicines to treat tobacco-related diseases are available at GST rates of zero per cent, 5 per cent, or 12 per cent GST, much below the 18 per cent levy on immediate treatment.