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The Budget has proposed to increase the basic excise duty by Rs 2 per 1,000 beedis rolled.
Mr B. Madhava, National President of the All-India Beedi Workers' Federation, said here this increase will raise the manufacturing cost of beedis.
Manufacturers may pass this hike on to customers by increasing the selling price. He said they may increase prices by around Re 1 for a packet of 25 beedis. Currently, a pack of 25 beedis costs Rs 8.50 to Rs 9. It may increase by a Re 1 or so, he said.
The Budget proposes an increase in the basic excise duty on hand-rolled beedis from Rs 8 to Rs 10 per 1,000, and from Rs 19 to Rs 21 per 1,000 on machine-rolled beedis.
GUTKHA
The Budget has also proposed that ‘paan masala' and ‘gutkha' in pouches are leviable to excise duty under the compounded levy scheme.
Mr A..S. Bhat, Managing Director of the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd, said the red variety of arecanut is an ingredient in the manufacture of ‘paan masala' and ‘gutkha'.
Already, growers of the red variety fear a gutkha ban by the Government. The current proposal will have a further impact on the prospects of the commodity. The price of red arecanut, which was in the region of Rs 170 a kg last year, is now at around Rs 140 a kg. This move may impact the price of red arecanut further, he added.
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