Industry & Economy
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Cigarettes
Govt defends leaving cigarette customs duty unchanged
K.R. Srivats
New Delhi
,
July 13
THE Finance Ministry has justified its decision to retain basic customs duty on cigarettes at the current level of 30 per cent, stating that any upward revision in the duty would not have been in the interest of the domestic industry.
In the run up to the Union Budget, the domestic cigarette manufacturers had pressed for a hike in applied rate of customs duty on cigarettes to the bound level of 150 per cent.
"Any move on our part to increase customs duty from 30 per cent to 150 per cent would have only encouraged import of contraband goods," a senior Finance Ministry official said.
Even as the domestic cigarette manufacturers are thrilled that the UPA Government has left the excise duties on cigarettes untouched (barring the 2 per cent education cess), they were hoping that the Finance Ministry would accede to their request for a hike in customs duty on cigarettes.
In the run up to the Union Budget, the domestic cigarette industry had urged the Finance Ministry to retain the existing specific duty structure for cigarettes. The tobacco industry contributes about 10 per cent of all-India excise collections.
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