India is likely to raise the price of cigarettes, tobacco, luxury goods, and soft drinks as part of an effort to mobilise revenue at a time when government resources seem to be drying up due to the COVID-19 pandemic.
A decision to this effect may be made at an upcoming meeting of the GST Council – the federal body which makes all policy decisions on indirect taxation. The council meeting is scheduled for 27 August.
A senior Finance Ministry official told Sputnik, “The GST Council will discuss imposition of cess on cigarette, tobacco, some of luxury items such as high value perfumes and luxury cars to earn revenues”.
The GST collection for this April was $4.3 billion, which was 72% less than the revenue collected during the same month last year. In May, collection was to the tune of $8.26 billion, which was 38% less than the revenue collected during the same month last year, according to data from India’s Ministry of Finance.
In June, the government earned $12 billion from GST. However, the monthly GST collections are nowhere near the $16.66 billion monthly revenue target.