Can A Hefty GST Rate Prevent Pan Masala Consumption And Cancer In India?

Posted by Chhagan Dewasi in Health and Life, Society
March 20, 2018

Pan masala is a mixture of betel nut, lime, catechu, along with various flavouring agents and other ingredients like colouring agents and chemicals. It is consumed by millions all over India.

The tradition of chewing pan, which still continues today, dates back to at least 2,500 years, long before the arrival of tobacco. Chewing pan is deeply rooted in the social customs and the diverse heritage of India. It is embedded in the Hindu culture and is referred to as one of the eight bhogas (enjoyments) of life. The betel quid was often presented as token of hospitality, and it was considered rude to decline it.

The consumption of pan masala affects almost every part of the human body even if it doesn’t come in direct touch. Areca nut, the main constituent in pan masala, is a major causative agent of oral submucous fibrosis (OSMF), which is mainly responsible for oral cancer in young people. Consumers of pan masala often ingest the juice obtained from chewing it, thereby leading to multiple, adverse effects in the gastrointenstinal system. It affects the genito–urinary tract too – it’s claimed that it increases structural abnormalities in sperms and leads to testicular cancer. By seeing all the above mentioned facts, we can say that pan masala is a major cause of various kinds of cancers in the human body.

In India, people have pan masala by choice and even with pride. However, as a welfare state, India’s basic aim should be ensuring public welfare – and that can only be achieved by protecting people from various diseases and other evils. Cancer is one of the reasons for the innumerable deaths in India. To protect citizens from cancer, the Indian government and state governments have taken various steps. The governments have planned many things like awareness programmes, free health check-up programmes and treatment at lower costs. But still, various kinds of cancer are increasing in India, day-by-day. It therefore becomes a necessity for the Indian government to take steps for the prevention of cancer.

So, the government has taken many steps to prevent the use of the things which increase the risk of cancer in people. While the great principle of welfare state can be fulfilled by the protection of the rights of citizens, it’s equally important to protect their health. One of the major ways in which this can be done is by working towards checking the use of things which cause diseases like cancer. Completely prohibiting the circulation of something is not an easy task in the world’s largest democracy. Consequently, the government has had to take steps which indirectly prevent the use of things which cause cancer.

Is an increase in taxation the only effective solution to the menace of the consumption of pan masala and other tobacco products? (Representative image)

Increasing the tax rates on pan masala and tobacco products is one of those steps taken by the government. In fact, this step has almost become a milestone in this journey of cancer prevention in India. Other steps too were taken to prevent the use of such substances like the passage of The Cigarettes and Other Tobacco Products Act (COTPA), 2003.This act was enacted to regulate the production and sale of tobacco products. But this had nothing to do with the cost of products.

Over the years, the sustained use of pan masala and tobacco products led to a substantial economic burden on the economy. A study in 1999 estimated that the cost of treating tobacco-related diseases was US$6.5 billion. According to another study, the cost was 16% higher than the total tax revenue generated from those products. So there was a need for a cost-effective tool to reduce the consumption of these products – and that step turned out to be increasing the taxation on these products.

This can be better understood by a study which estimated that a 10% increase in price of bidis could reduce the demand by 9.2% in rural areas and by 8.5% in urban areas. So, from this study, we can infer that the increased price of these products can potentially reduce their consumption. After all, the prices of these products always affect the consumption patterns of people from the lower socio-economic classes – and for the most part, the consumers of these products belong to the lower echelons of the socio-economic hierarchy.

Historically, these products have been taxed, but the powers of taxation were divided between the central and the state governments. For central government, there was the excise duty; for the states, there was VAT. The excise duty rates were uniform, but the rates of VAT varied from state to state. So, there was the risk of these products being smuggled between the states. So, there was a need to change the taxation system on these products.

In 2017, India saw a great change in its indirect taxation system. A new system of taxation was implemented . This system came with changes in tax rates on pan masala and related products. In this system, the tax rates on pan masala are 28 % (as CGST) and 60% (as cess compensation). Earlier, the excise duty was approximately 76%.

This step may become a successful step in preventing cancer in India, if the following suggestions are also noted:

1. The revenue generated by the increased taxes on pan masala should be spent on control  and prevention programmes. This step may indirectly stop the spread of cancer in two ways:

Firstly, people are less likely consume these products.

Secondly, if someone does consume these products, then the revenue generated from the increased rates on these products can be used for their treatment.

2. Taxing pan masala and related policies should be included in development studies. That will equip development and public health professionals with the necessary means to aid in the prevention of cancer.

3. A portion of the generated revenue should be dedicated to those institutions which work in this field.

4. The revenue generated from these products should, above all, be used for awareness programmes – so that these programmes too can help in the fight against cancer.

In my opinion, the increased tax rates on these products under the GST regime will absolutely be a great step in the prevention of cancer. Due to the increased rates, it will not be easily available to everyone, while the revenue generated can be used for developing health and welfare facilities. This will ultimately pave the way for a healthy and wealthy India.


Featured image source: Wikimedia commons