**Summary:**
In response to Lok Sabha Unstarred Question No. 4008 on August 18, 2025, regarding the taxation of sugary drinks, alcohol, and tobacco, the Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, addressed the World Health Organization's (WHO) 3 by 35 Initiative. Launched in July 2025, this initiative urges countries to increase taxes on sugary drinks, alcohol, and tobacco by 50% over the next ten years to reduce consumption and prevent related noncommunicable diseases.
The response clarifies that the Goods and Services Tax (GST) rates are determined based on the recommendations of the GST Council, which includes members from both the Union Government and state/UT governments. Alcohol for human consumption falls under the purview of State governments.
Currently, aerated drinks containing added sugar are subject to the highest GST rate of 28%, along with a Compensation Cess of 12%. Tobacco products also attract a 28% GST, with varying Compensation Cess rates up to 290%. Furthermore, tobacco products are subject to central duty in addition to GST and Compensation Cess.
Key Entities Referenced
World Health Organisation (WHO): An international organization that has urged countries to increase taxes on sugary drinks, alcohol, and tobacco to address public health problems.
Sugary drinks, alcohol, and tobacco: Products that the World Health Organization recommends taxing more heavily to reduce consumption and prevent noncommunicable diseases.
GST Council: The body that recommends GST rates, comprising members from the Union Government and state/UT governments.
Union Government: The central government of India.
State governments: The governments of the individual states within India, which have purview over alcohol for human consumption.
GST: Goods and Services Tax, applied to aerated drinks and tobacco products.
Compensation Cess: An additional tax levied on aerated drinks and tobacco products, on top of GST.
3 by 35 Initiative: An initiative launched by the World Health Organization (WHO) in July 2025, urging countries to increase taxes on sugary drinks, alcohol, and tobacco by 50% over the next 10 years.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
UNSTARRED QUESTION NO. 4008
TO BE ANSWERED ON MONDAY, AUGUST 18, 2025/ SRAVANA 27,
1947(SAKA)
TAXATION OF SUGARY DRINKS, ALCOHOL AND TOBACCO
4008. COM. SELVARAJ V:
SHRI SUBBARAYAN K:
Will the Minister of FINANCE be pleased to state:
(a) whether it is a fact that the World Health Organisation (WHO)
has demanded the countries to raise the prices of sugary drinks,
alcohol and tobacco by 50 percent over the next ten years through
taxation to tackle chronic public health problems; and
(b) if so, the details thereof and the Government's reaction
thereto?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) & (b) As per ‘3 by 35 Initiative’ launched by World Health
Organization (WHO) in July 2025, countries have been urged to
increase taxes on sugary drinks, alcohol, and tobacco by 50 % over
the next 10 years to reduce consumption and to prevent related
non-communicable diseases. GST rates are prescribed on the basis
of the recommendations of GST Council which comprises of
members from Union Government and state/UT governments.
Alcohol for human consumption is under the purview of State
governments.
Currently, aerated drinks containing added sugar attract the highest
rate of 28% along-with Compensation Cess of 12%. Tobacco
products attract 28% GST along-with varying Compensation Cess
rates ranging upto 290%. In addition, tobacco products also attract
central duty over and above GST and Compensation Cess.
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