Is Alcohol a Luxury or a Necessity?

Alcohol has been a contentious topic for centuries, and its taxation has always been a matter of debate. In many countries, including India, alcohol is exempt from the Goods and Services Tax (GST). This exemption has led to numerous questions and controversies.

The Reasons for GST Exemption

1. In many countries, alcohol taxes have been a significant source of revenue for governments and exempting it from a new tax like GST might have been seen as a way to maintain this revenue stream.

2. In India, alcohol is primarily regulated and taxed by state governments. Excluding it from GST might have been seen as a way to preserve state autonomy and control over this important revenue source.

3. Alcohol consumption is associated with various social and health problems. Excluding it from GST might have been seen as a way to discourage consumption by making it more expensive.

States with higher alcohol revenue:

1.Tamil Nadu

2. West Bengal

3. Kerala

4. Andhra Pradesh

5. Rajasthan

While 29.2% of men in India consume alcohol, the national average for women is only 1.2%. 23 Alcohol consumption by men is highest in South India, especially in Tamil Nadu, where in certain areas, >45% of men regularly consume alcohol.

West Bengal is placed second in the list of the five biggest alcohol consuming states in the country, with 14 million people consuming alcohol.

This state has a high proportion of children consuming alcohol at (3.9%).

270,000 people who consume alcohol in West Bengal need help for alcohol problems.

Despite the obvious harm caused by alcohol to people in this state, alcohol availability has been further increased through home delivery, which was pushed during the COVID-19 pandemic.

here, the question arise, Should alcohol be subject to GST?

This is a complex issue with no easy answer. While GST may increase the revenue generated by alcohol, but it could also have negative consequences, such as higher prices for consumers and increased illegal trade.

While the exemption from GST has its advantages, it also raises important questions about equity, public health, and the economic impact of alcohol taxation. As the country continues to evolve, it's essential to carefully consider the pros and cons of alcohol taxation and explore potential reforms.

do you think it's fair for governments to rely so heavily on alcohol revenue? Should there be a greater emphasis on public health and social well-being when considering alcohol taxation?

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