Andhra Pradesh tobacco trade, farmers seek rollback of GST

Tunia Cherian | | Updated on: Jan 12, 2018


The Virginia tobacco trade as well as farmers in Andhra Pradesh are urging the Centre to roll back GST imposed on tobacco leaves as well as raw tobacco sold to domestic manufacturers or exporters, expressing concern over the fallout of the move on the trade and cultivation.

Farmers in Andhra Pradesh resorted to a day's boycott of the ongoing auctions on Monday in protest against the move and threatened to take up agitation for a longer duration if the Centre did not reconsider its move.

Tobacco auctions resumed on the AP floors on Tuesday, according to an official of the Tobacco Board here. He said till date 48 million kg of tobacco had been sold on the floors in Andhra Pradesh at an average price of Rs 140 a kg and the total expected production in the state is put at 104 million kg against an authorised crop size of 130 million kg.

Farmers apprehend that there may be substantial reduction of prices on the auction floors with the imposition of GST. "It was Chaudhury Charan Singh, the former prime minister, who withdrew the central excise tax on raw tobacco and imposition of GST now will certainly have an adverse impact on tobacco cultivation and trade, on which millions are dependent," said G. Seshagiri Rao, a leader of a farmers' association.

The Indian Tobacco Association here, a trade body, has decided to take a delegation to New Delhi shortly and meet Finance Minister Arun Jaitley, requesting him to roll back GST. "The GST council has imposed 5 per cent on tobacco leaves and 28 per cent on unmanufactured (raw) tobacco sold to domestic manufacturers or exporters. It will certainly hit the farmers and the trade hard. The industry is already passing through a crisis and this will further aggravate it," says M. Umamaheswara Rao, president of the ITA, appealing to the Centre to have a rethink on the issue.

Ou​​r Delhi Bureau adds: The Federation of All India Farmer Associations (FAIFA) has appealed to the government to roll back 5 per cent goods and services tax (GST ) on raw tobacco and the treatment of tobacco crop like “any other agricultural crop.”

Karatam Reddy Naidu, Honorary president of FAIFA said "Imposing 5 per cent on tobacco leaves is not correct as some of tobacco crops used for bidis and other products are not brought to the tobacco auction floors or APMCs but are sold in local mandis and villages in an unorganised manner. "

Published on June 13, 2017
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