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Banning E-Cigarettes Necessity in India, Tobacco Sale Can't be Stopped Due to Mega Taxes - Analyst

© AP Photo / Nam Y. HuhFILE - In this April 23, 2014 file photo, a man smokes an electronic cigarette in Chicago.
FILE - In this April 23, 2014 file photo, a man smokes an electronic cigarette in Chicago. - Sputnik International
New Delhi (Sputnik): The Indian government enacted an ordinance in September to ban e-cigarettes containng a provision that the storage of e-cigarettes could be punishable with imprisonment of up to six months or a fine of up to Rs. 50,000 ($696) or both.

Indian Health and Family Welfare Minister Harsh Vardhan is introducing the Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Bill, 2019, in the Parliament to put a blanket ban on e-cigarettes.

The ordinance issued by the government is valid only for six months, and it must be approved by the Parliament within six weeks of the commencement of a Parliament session.

While e-cigarettes have been banned, the government has failed to ban  the production or sale of tobacco in the country. As per the World Health Organisation Report 2018, tobacco kills more than one million people annually in India. However, tobacco production and consumption remains legal in India.  

“The government cannot ban tobacco production or sale due to the economic implication. It is a source of revenue for state governments, just like liquor", says tax expert lawyer Ved Jain.

The government in the state of Haryana banned liquor but it had to withdraw it because of the loss in revenue, Jain adds.

Tobacco and tobacco products are a large contributor to the government’s tax revenue. The total tax revenue collected from tobacco products is around Rs. 40,000 crores ($5.6 billion) annually, the Tobacco Institute of India claims. It also says that cigarettes which bear the brunt of taxation in India are the major revenue contributor from the Tobacco sector.

“Current ban on e-cigarettes is to avoid habit-building among its consumers. The government doesn’t want to tax to avoid making it another source of revenue, which will eventually make it impossible to put a ban on it", Jain says.
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