The Government has prepared a draft bill to increase the age to allow consumption of cigarettes and tobacco products.
The Centre drafted the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply, and Distribution) Amendment Act, 2020 to raise the age for allowing sale of cigarettes and tobacco products to 21 years from 18 years.
The provision is part of the new bill being piloted by the Union Health Ministry and seeks to further amend the Cigarettes and other Tobacco Products Act, 2003.
The bill however poses a problem for cigarette makers such as VST Industries, ITC and Godfrey Phillips who could face “potential headwinds as it will become more difficult to add consumers and will affect volumes by virtue of sale of only sealed packs being allowed,” said Abneesh Roy, research analyst.
Further for these companies, the development would also not pair well with the reports doing the rounds of increased goods and services tax (GST) hike on the product.