Pricing of tobacco products: Pre and post GST implementation.

Abstract There is ample evidence stating that any taxation policy that effectively increases the real price of tobacco products reduces its use. In the past, several countries have documented instances; wherein the intended effects of tobacco taxation were undermined by aggressive pricing strategies of the industry. However, there is a dearth of such evidence in Indian context. Hence, the current study was conducted to ascertain the changes in the retail price of locally available tobacco products during pre and post GST period in India. This cross-sectional analytical study was conducted among all available tobacco products in the states of Meghalaya, Odisha, Puducherry and Telangana. The information on maximum retail price (MRP) pre and post GST implementation on tobacco products was gathered from the owners of Point of Sale (PoS), vendors and retailers of various tobacco products. The results showed that of the total 154 brands observed pre and post GST implementation, 33.12% [95%CI 25.75–41.15] did not exhibit any increase in their price. The proportion of tobacco product brands with decrease/no change in price was a higher in Meghalaya (PR = 44; 95%CI: 6.32–306.3), Odisha (PR = 23; 95%CI: 3.25–162.7) and Puducherry (PR = 1.48; 95%CI: 0.1–22.84) as compared to Telangana. As compared to cigarettes, smokeless tobacco (PR = 1.84; 95%CI 1.16–2.89) and bidi (PR = 1.74; 95%CI: 0.78–3.9) had more number of brands with a decrease/no change in price post GST implementation. Moreover, four new brands of smokeless tobacco were introduced into the market following GST implementation. The study clearly suggests a departure from the outcomes envisaged by taxation policy on tobacco products in the country. Given the importance of price as a determinant in tobacco use especially among youth, there is an urgent need for strengthening our tax regime for tobacco products.