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As Finance Minister Nirmala Sitharaman gets ready to present her maiden Budget, tobacco farmers have appealed to her to have a sympathetic view and ease tax burden on cigarettes.
“During the last six years the consumption of Flue Cured Virginia (FCV) tobacco has come down due to excessive taxation on cigarettes. This, however, has led to increase in sales of smuggled cigarettes,” Javare Gowda, President of Federation of All India Farmer Associations (FAIFA), has said. In a memorandum submitted to the Minister on Thursday, he said that any additional tax burden would put further pressure on the livelihood of tobacco farmers.
The FAIFA represents farmers growing commercial crops in Andhra Pradesh, Telangana, Karnataka and Gujarat.
The association wanted the Minister to correct an error in cigarette taxation under the new tax regime, which did not account for the cascading effect on excise duty which was in vogue in the pre-GST era.
It has also sent the appeal to the offices of Prime Minister and Union Ministries of Health and Family Welfare, Agriculture and Commerce and Industry. “The cigarette value chain is reeling under penalising taxation on account of continuous increases in excise duties and compensation cess on cigarette, which have cumulatively gone up twice between 2011-12 and 2017-18. This resulted in reduction of cigarette volumes by a fourth since 2012-13,” he said.
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