Cigarettes, gutkha to cost more in Delhi

June 22nd, 2009 - 10:07 pm ICT by IANS  

New Delhi, June 22 (IANS) Get ready to pay more for cigarettes and gutkha (chewing tobacco) with the Delhi government announcing an increase in tax on tobacco products in its budget presented Monday.
Delhi state Finance Minister A.K. Walia announced a raise in VAT on tobacco (cigarettes) and gutkha from 12.5 percent to 20 percent in the 2009-10 budget in the Delhi assembly here. Beedis (hand rolled cigars) have been exempt from the tax.

“Cigarettes and gutkha are injurious for health. So, keeping in mind the health of Delhiites, we have taken the decision of increasing the tax on the products,” Walia told reporters after presenting the budget.

He explained that the increase would mean a hike of 67 paise on every Rs.10 spent by a consumer.

“It will result in an increase in revenue of Rs.70 crore, of which Rs.51 crore will come from tobacco and Rs.19 crore from gutkha sales,” Walia said.

On the other hand, the minister reduced the luxury tax on hotels from 12.5 percent to 10 percent with the upcoming 2010 Commonwealth Games in mind.

“It is a breather for the tourism industry keeping in mind the 2010 Games. It was being contemplated for some time,” a senior government official told IANS.

“The increase in taxes from tobacco will be offset with the reduction in luxury tax,” Walia informed.

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