30% tax on non-virginia tobacco can bring Rs 30,000 revenue: NHM

Guwahati, May 18 () A non-governmental organisationhas claimed that a 30 per cent tax on non-virginia tobacco canfetch Rs 30,000 crore revenue and it can be used by thegovernment to fight the COVID-19 pandemic.

The National Health Forum (NHM), which works in the fieldof tobacco control had recently written a letter to the UnionFinance and Health ministries and sought to regulate the saleof non-virginia tobacco, which is not the case as of now.

"As per our estimates, a 30 per cent levy as a reversecharge levied upon and paid by the manufacturers and dealersof non-virginia tobacco products will yield a revenueincrement of around Rs 30,000 crore," NHF Managing TrusteeMandakini Sinh said in a statement.

This will lead to a far wider net of taxation and alltypes of tobaccos will be uniformly brought into the tax net,she claimed.

"COVID-19 pandemic has caused widespread destruction ofeconomic activity and there is a need to channel increasedresources in resurrecting economic activity and provide reliefto the jobless. A new source of tax collection will be a greatboost to support the rebuilding efforts," Sinh said.

Currently, all tobacco products manufactured using non-virginia tobacco such as burley tobacco are in the unorganisedsector and there is large scale evasion of tax bymanufacturers and scant respect for the tobacco control laws,she claimed.

The non-virginia tobacco is used in the manufacture ofchewing varieties of tobacco, hookah, gutkha, kiwam, gudaku,zarda and bidis that are extremely dangerous in the context ofthe COVID-19 pandemic as they need to be spat out afterconsumption, NHM said.

"These are neither appropriately taxed nor its growers,who are the poorest of poor farmers, get stable prices fortheir produce. There are private intermediaries and middlemenwho take advantage of the situation and milk the poor Indianfarmers," the NGO said.

In its letter to the Central government, the NHM appealedfor regulating the sale of non-virginia tobacco, whichconstitutes about 85 per cent of tobacco grown in India,through auction platforms overseen by the Tobacco Board ofIndia.

"The initiative will have a double benefit -- firstly theenhancement of revenue and secondly controlling the sale ofthe so far unregulated tobacco products in India," the releasesaid. TRRG RG