Does Higher Tax on Carbonated Drinks Impact Body Mass Index? Evidence from India

Abstract

The implementation of the Goods and Services Tax (GST) in India in 2017 brought about changes of varying extents in the taxation of aerated (carbonated) sugar-sweetened beverages (ASBs) across different states. This variation stemmed from the pre-GST tax structure, which included a uniform excise duty imposed by the central government and varying value-added taxes (VAT) applied by individual state governments. Leveraging this tax variation, we utilize household-level data from the Demographic and Health Surveys (DHS) to investigate the effects of ASB taxation on household consumption patterns and associated health outcomes, such as changes in body mass index.