The GST issue has disrupted the ongoing virginia tobacco auctions in Andhra Pradesh, with the Indian Tobacco Association (ITA) deciding to stay away from the auction floors on Thursday and Friday, to press for the rollback of GST. The farmers, who are opposing GST, have also decided to do the same.

According to ITA president M. Umamaheswara Rao, the decision has been taken to exert pressure on the GST council which is scheduled to meet on June 18. "We are appealing to the Union Finance Minister, Arun Jaitley, and the GST council to reconsider the issue and roll back GST. GST at 5 per cent on tobacco leaf and 28 per cent on unmanufactured tobacco sold to domestic manufacturers and exporters will prove to be too much of a burden on the trade, farmers and workers in the field. It will be a huge blow," he has said.

AP farmers are also very unhappy, as GST could not have come at a worse time for them. Roughly half of the crop produced in the State this season, 48-49 million tonnes or so, has been sold on the auction floors till date at an average price of Rs 140 a kg. The actual production in the State may be 103-104 million kgs as against the authorised crop size of 130 million kgs. Climatic conditions in parts of the state have driven down the production and there is no excess output this season. Till now tobacco prices have been fairly satisfactory and GST has come as a bolt from the blue.

Farmers are apprehensive that the trade may further depress prices, using GST as a pretext, and they want the Union Commerce Ministry to come to their rescue.

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