The share of tax revenue from tobacco products, including cigarettes and bidi, in India’s Gross Tax Revenue ranged from 1.27% in 2016-17 to a peak of 2.75% in 2019-20, before settling at 2.2% in 2023-24 (based on revised estimates). This includes GST, excise duty, compensation cess, and other levies. The Government does not earmark tobacco tax revenue for healthcare but uses it as part of the overall Gross Tax Revenue. In Budget 2024-25, ₹87,657 crore has been allocated to the Department of Health and Family Welfare, funded from general government receipts.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
UNSTARRED QUESTION NO.215
TO BE ANSWERED ON MONDAY, FEBRUARY 3, 2025
TAX COLLECTED FROM TOBACCO PRODUCTS
215. SHRI RAJA RAM SINGH:
Will the Minister of FINANCE be pleased to state:
(a) the share of taxes collected from Tobacco, Cigarettes, Bidi and allied products in the Gross Tax Revenue of Government for the financial year 2016-17 to 2023-24;
(b) whether the Government seek to divert a part of the taxes collected from tobacco and allied products towards the development of the healthcare sector and if so, the details thereof; and
(c) the initiatives and action taken by the Government in this regard?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a): The share of taxes [inclusive of GST, Compensation Cess, Basic Excise Duty, National Calamity Contingent Duty (NCCD) and duties of customs] collected from Tobacco and tobacco products covered under Tariff Headings 2401, 2402, 2403 and Pan Masala in the Gross Tax Revenue of Government for the financial years 2016-17 to 2023-24 is as follows:-
| Financial Year | % share of taxes collected from Tobacco and tobacco products in Gross Tax Revenue |
| 2016-17 | 1.27 |
| 2017-18 | 2.3 |
| 2018-19 | 2.58 |
| 2019-20 | 2.75 |
| 2020-21 | 2.62 |
| 2021-22 | 2.29 |
| 2022-23 | 2.39 |
| 2023-24 | 2.2* |
*based on revised estimates for FY 2023-24
(b) and (c): Taxes collected from tobacco, similar to taxes collected from other sources, together form part of the overall Gross Tax Revenues (GTR) of the Government of India and are used to fund all schemes and programmes of the Government. In Budget 2024-25, an amount of Rs. 87,657 Crores has been allocated to fund the requirements of the Department of Health and Family Welfare. This will be met from both capital and revenue receipts of the Government of India.
