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New Delhi, Feb 3 () Cigarette stocks continued to remain under pressure on Monday led by ITC which tumbled up to 5 per cent as tobacco related products are set to become more expensive due to hike in excise duty proposed in the Union Budget for 2020-21.
 Shares of ITC dropped 5.09 per cent to close at Rs 207.70 on the BSE.
 VST Industries declined 1.48 per cent and Godfrey Phillips India fell 0.86 per cent.
 Cigarette stocks on Saturday had also plunged up to 7 per cent, led by ITC.
 A large number of items including cigarettes, chewing tobacco are set to become more expensive due to hike in taxes proposed in the Union Budget for 2020-21.
 "As a revenue measure, I propose to raise excise duty, by way of National Calamity Contingent Duty on cigarettes and other tobacco products. However, no change is being made in the duty rates of bidis," Finance Minister Nirmala Sitharaman said.
 While presenting the Budget on Saturday, the finance minister proposed to increase the National Calamity Contingency Duty on cigarettes, hookah, chewing tobacco, snuff and tobacco extracts and essence.
 On increase in excise duty on cigarettes and tobacco products, HDFC Securities in a report said, "This will impact ITC and other cigarette companies, however, the extent of pass through and volume impact is uncertain at this point." SUM SHW
SHW

Cigarette stocks continued to remain under pressure; ITC tanks 5 pc

New Delhi, Feb 1 () Cigarette stocks on Saturday plunged up to 7 per cent, led by ITC, as tobacco related products are set to become more expensive due to hike in excise duty proposed in the Union Budget for 2020-21.
ITC tanked 6.97 per cent to close at Rs 218.85 on the BSE. During the trade, it plummeted 8.31 per cent to Rs 215.70 -- its 52-week low. It was the worst performer in the Sensex pack.
Shares of Godfrey Phillips India dropped 6.82 per cent, VST Industries 5.40 per cent and Golden Tobacco 0.18 per cent.
 A large number of items including cigarettes, chewing tobacco are set to become more expensive due to hike in taxes proposed in the Union Budget for 2020-21.
 "As a revenue measure, I propose to raise excise duty, by way of National Calamity Contingent Duty on cigarettes and other tobacco products. However, no change is being made in the duty rates of bidis," Finance Minister Nirmala Sitharaman said. 
 
 

 
 SUM RUJ
RUJ

Cigarette stocks slump up to 7 pc after Budget hikes excise duty on tobacco products

This budget, the excise duty has been hiked by up to 6 % for cigarettes of all sizes. This wasn't expected at all. Still the shares of ITC Limited are going good because it's still below 10%. 
 
 
<a href="http://www.businessinsider.in/budget/common-man-budget">Cigarette </a>smoking is injurious to health. This statutory warning has taken a toll on the tobacco farmers in India. And this budget the tobacco farmers of the country wants the government not to impose any more taxes on legal cigarettes. 
 
<a href="http://www.businessinsider.in/budget/common-man-budget">ALSO READ: WHAT CAN A COMMON MAN EXPECT THIS BUDGET</a> 
 
While the market is decreasing every other day as far as consumption is concerned, the Indian tobacco exports are also sluggish and this has resulted in 22 % decline in returns to farmers. 
 There are 96,865 registered tobacco farmers and many more that are not registered in India. Around 0.25% of India's cultivated land is used for tobacco production. Since the independence, the Indian government has supported growth in the tobacco industry. India has seven tobacco research centres that are located in Jeelugumilli, Andhra Pradesh, Kandukuru, Andhra Pradesh, <keyword id="52887" type="CITY" weightage="20" keywordseo="Guntur">Guntur</keyword>, Andhra Pradesh, Kalavacherla, Andhra Pradesh, Hunsur, Karnataka., Vedasandur, <keyword id="20154" type="ORGANIZATION" weightage="20" keywordseo="tamil-nadu">Tamil Nadu</keyword>, Dinhata, <a href="http://www.businessinsider.in/budget/common-man-budget">West Bengal</a> and <a href="http://www.businessinsider.in/budget/common-man-budget">Rajamundry </a>houses the core research institute. The government has set up <keyword id="162734" type="ORGANIZATION" weightage="20" keywordseo="Tobacco-Board">Tobacco Board</keyword>, Guntur. <a href="http://www.businessinsider.in/budget/common-man-budget">ALSO READ: YOU CAN OWN A CAR LIKE THIS</a> 
 Guntur is also well known place for tobacco plantation. The <keyword id="672789" type="ORGANIZATION" weightage="20" keywordseo="Central-Tobacco-Research-Institute">Central Tobacco Research Institute</keyword> works under the aegis of Indian Council of Agricultural Research. Tobacco crop is cultivated in an area of 0.45 M ha (0.27% of the net cultivated area) producing ~ 750 M kg of tobacco leaf. India is the 2nd largest producer and exporter (in quantity terms) after China and <keyword id="6355226" type="COUNTRY" weightage="20" keywordseo="Brazil">Brazil</keyword>, respectively. 
 Ahead of the Budget 2017, the <keyword id="3404445" type="UNKNOWN" weightage="20" keywordseo="federation-of-all-india-farmer-associations">Federation of All India Farmer Associations</keyword> (<keyword id="3164346" type="UNKNOWN" weightage="20" keywordseo="FAIFA">FAIFA</keyword>) wants to bring stability in farm prices of the crop. 
 The non-profit organisation representing farmers across the states, including Andhra Pradesh, Telangana, Karnataka and <keyword id="6354766" type="COMPANY" weightage="20" keywordseo="Gujarat">Gujarat</keyword>, appealed to <a href="http://www.businessinsider.in/budget/common-man-budget">Finance Minister </a><keyword id="143010" type="PERSON" weightage="20" keywordseo="Arun-Jaitely">Arun Jaitely</keyword>, to avoid “the <a href="http://www.businessinsider.in/budget/common-man-budget">onslaught</a> of heavy taxation on legal cigarette industry” and help bring stability in farm prices of tobacco. 
 “We are very disturbed because of the declining off-take from domestic manufacturers … Regulatory overreach has created panic and strain on the FCV tobacco farmers in the country,” FAIFA General Secretary <keyword id="1407736" type="PERSON" weightage="20" keywordseo="Murali-Babu">Murali Babu</keyword> said in a statement. 
 
“Excessive increase in the excise duties on<a href="http://www.businessinsider.in/budget/common-man-budget"> tobacco products</a>, cumulative increase of 118 per cent since 2012/13, leading to 22 per cent” has led to shrinkage in the legal cigarette volumes, FAIFA said. 
 (Image: <keyword id="76338" type="CITY" weightage="20" keywordseo="Reuters">Reuters</keyword>))

Excise duty in cigarette hiked. Tobacco farmers in india are struggling to make ends meet

New Delhi, Feb 1 () A large number of items including cigarettes, chewing tobacco along with imported products, like edible oils, fans, table, footwear, electric vehicles, tableware, kitchenware, toys and furniture are set to become more expensive due to hike in taxes proposed in the Union Budget for 2020-21.
 On the other hand, newsprint, sports goods, microphone will become cheaper as Finance Minister Nirmala Sitharaman proposed reduction in duties on these items in the Budget for 2020-21.
 Following is a list of imported items that will become costlier following the announcements in the Budget --
 &gt; Butter ghee, butter oil, edible oils, peanut butter
 &gt; Whey, meslin, maize, sugar beet seeds, preserved potato
 &gt; Chewing gum, dietary soya fibre, isolated soya protein
 &gt; Walnuts (shelled)
 &gt; Footwear, shavers, hair clippers, hair-removing appliances
 &gt; Tableware, kitchenware, water filters, glassware
 &gt; Household articles of porcelain or china
 &gt; Rubies, emeralds, sapphires, rough coloured gemstones
 &gt; Padlocks
 &gt; Hand sieves and hand riddles
 &gt; Combs, hairpins, curling pins, curling grips, hair curlers
 &gt; Table fans, ceiling fans and pedestal fans
 &gt; Portable blowers
 &gt; Water heaters and immersion heaters
 &gt; Hair dryers, hand drying apparatus and electric irons
 &gt; Food grinders, ovens, cookers, cooking plates, boiling rings, grillers and roasters
 &gt; Coffee and tea makers and toasters
 &gt; Electro-thermic fluid heaters, devices for repelling insects and electric heating resistors
 &gt; Furniture, lamps and lighting fittings
 &gt; Toys, stationery item, artificial flowers, bells, gongs, statuettes, trophies
 &gt; Printed Circuit Board Assembly (PCBA) of cellular mobile phones, display panel and touch assembly, fingerprint readers for use in cellular mobile phones
 The government has proposed to hike the Excise duty on cigarettes, Hookah, Chewing tobacco, Jarda scented tobacco and Tobacco extracts and essence.
 The government has proposed to reduce the custom duty on the import of the following item
 &gt; Pure-bred breeding horses
 &gt; Newsprint C
 &gt; Sports goods
 &gt; Microphone
 &gt; Electric vehicles. KRH DRR

Budget 2020: Cigarettes, imported products, furniture, footwear to become costlier

It’s been a month that India’s leading conglomerate <keyword id="121459" type="CITY" weightage="20" keywordseo="ITC-Ltd">ITC Ltd</keyword> has increased the prices of its cigarettes <keyword id="42407" type="ORGANIZATION" weightage="60" keywordseo="Navy">Navy</keyword> Cut and <keyword id="489337" type="UNKNOWN" weightage="20" keywordseo="Gold-Flake">Gold Flake</keyword>. And with the budget day nearing, the smokers enjoying the winter breeze are anticipating another hole in the pocket very soon. The heat of the hike in price was felt by the people who buy full packet as the price of Navy Cut packet, which has gone up by Rs 11 to Rs 89 now. <a href="http://www.businessinsider.in/chinas-tourism-is-much-ahead-of-india-hereswhy/articleshow/56719212.cms">ALSO READ: Why China is ahead of us in tourism?</a> 
 
While the sudden surge in the price hasn’t been explained much by the company, revision of prices is quite common in pre-budget season. 
The demonetization in November has affected the tobacco industry quite deep. Most road side sellers, for first few weeks, didn’t understand how to operate digital payments. And that served as a major setback for the industry. While cigarette is quite important from the economy point of view, doctor’s advice, healthy living and several anti-smoking drives have already unnerved the sector since last few years. 
 
If the prices go further up, which is very highly possible this time, the<a href="http://www.businessinsider.in/searchresult.cms?query=tobacco&amp;sortorder=effectivedate"> cigarette companies</a> would need to subsidize on the prices and incur some losses as usual. 
 
<a href="http://www.businessinsider.in/your-air-travel-might-get-expensive-after-the-budget-speech-in-february-heres-why/articleshow/56647465.cms">ALSO READ: Air travel to get dearer after GST</a> 
 The finance ministry is also ready with <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> rollout, which is now expected to go live on July 1. While cigarettes have been kept at 40% tax limit, experts believe, it should have been at 80%. Since these are a highly demerit product, <a href="http://www.businessinsider.in/searchresult.cms?query=tobacco&amp;sortorder=effectivedate">40% of GST</a> indicates need for Rs 1902 crore of excise tax per 1,000 sticks in order to make sure the revenue from cigarettes stay intact. 
 
“The taxation on tobacco should also be rationalized by a duty structure which is a mix of fixed and <a href="http://www.businessinsider.in/searchresult.cms?query=tobacco&amp;sortorder=effectivedate">ad-valorem</a> duty rather than only fixed duty component. By doing this, the Government will be able to generate additional revenue to the tune 20K-30K crore per annum which can be used for social and other activities and will also be discouraging the consumption of tobacco as per the WHO norms. Meanwhile alternative crop for tobacco farmers should also be given top priority, so as to keep their interest,” said <keyword id="67987" type="PERSON" weightage="20" keywordseo="Sanjay-Dalmia">Sanjay Dalmia</keyword>, Chairman of <keyword id="4095501" type="UNKNOWN" weightage="20" keywordseo="dalmia-group-of-companies">Dalmia Group of Companies</keyword> and also an expert in tobacco and pharmaceutical sector.

Statutory
Warning: Cigarettes to cost more after budget?

New Delhi, Feb 20 () Tobacco farmers' body FAIFA on Thursday said the hike in taxes on cigarettes announced in the Budget 2020-21 will only increase the smuggled cigarette trade which, in turn, will affect livelihoods of millions of tobacco growers and farm workers. The Federation of All India Farmer Associations (FAIFA) said it had also appealed to Finance Minister Nirmala Sithraman to have a "pragmatic approach" on cigarette taxation at a meeting on Wednesday evening. The hike in national calamity contingent duty (NCCD) on cigarettes proposed in the Budget is a major setback to the FCV tobacco farmers who have been fighting torrential and unseasonal rainfall this year in Andhra Pradesh and Karnataka, FAIFA said in a statement. "Indiscriminate increase of excise duty on cigarettes will result in reduction in legal cigarette production and this will reduce the tobacco purchases of domestic manufacturers, impacting market prices for farmers thereby putting more pressure on farmer's earnings and causing further stress," it said. Commenting on the hike in NCCD on cigarettes, FAIFA President Javare Gowda said, "This tax increase will provide a further boost to the smuggled cigarette trade and (lead to) decline in domestic demand, resulting in weak demand in the ensuing auctions." He further said the hike in NCCD was unexpected as several representations were made to the government to make it aware of the current situation of tobacco farmers and the ground-level realities of the struggles and losses that are being faced by them due to crop damage and also smuggled and illegal cigarette markets. In the Budget, Sitharaman had announced increasing NCCD on cigarettes, ranging from Rs 200-Rs 735 per thousand sticks, depending upon length of cigarette and on filter and non-filter basis. It was increased to 60 per cent from 45 per cent on smoking mixtures for pipes and cigarettes, while on other forms of smoking tobacco (other than smoking mixtures for pipes and cigarettes) and forms of chewing tobacco, it was increased to 25 per cent from 10 per cent. Gowda claimed that due to higher taxation, smuggled, illicit and contraband cigarettes along with WHO regulations, FCV production has come down to 210 million kg in 2019-20 from 325 million kg in 2013-14. It has resulted in "loss of more than Rs 5,000 crore (cumulative) to the FCV Tobacco Farming community", he added. In contrast, he said the market for illicit cigarettes is rising and has doubled from a level of 12.5 billion sticks in 2005 to 26.5 billion sticks in 2018 making India the fourth-largest and fastest-growing illegal cigarette market in the world. "Based on the current tax rates on cigarettes, it is estimated that the government loses Rs 13,000 crore in tax revenues per annum on account of illegal cigarette trade," Gowda claimed. RKL HRS

Tobacco farmers' body urges govt for 'pragmatic' approach on cigarette taxation

New Delhi, Dec 17 () A day before the GST Council meeting, farmers' body FAIFA on Tuesday asked the government to have a taxation policy that disincentivises cigarette smuggling in India. 
 The Federation of All India Farmer Associations (FAIFA), which claims to represent farmers of commercial crops from various states, including Andhra Pradesh, Telangana, Karnataka and Gujarat, said there has been an increase in smuggled, illicit and contraband cigarettes due to higher taxation on the legal cigarette industry. 
 As a result, tobacco farmers have been adversely affected, the body said in a letter to Finance Minister Nirmala Sithraman, and asked the government to save livelihoods of such tobacco farmers. "FCV tobacco farmer is on verge of losing his one and only livelihood due to increase in input costs and drastic decrease in income which is caused by illicit cigarette trade in India," FAIFA president Javare Gowda said in a statement.
 He further said, "We would like to appeal to government to have a taxation policy that disincentivises cigarette smuggling in India, which will help curb illicit trade and increase the demand of domestic Indian grown tobacco."
 FAIFA's demand comes a day ahead of the meeting of the GST Council, the highest decision making body of the indirect tax regime, here on Wednesday.
 The tobacco farmers' body claimed that there has been over 40 per cent reduction in FCV (Flue-Cured Virginia) tobacco cultivation, resulting in loss of more than Rs 5,000 crore to farming community in the last six years.
 Moreover, the government revenue loss is in excess of Rs 13,000 crore on account of illicit cigarette trade, it claimed.
 Due to higher taxation, smuggled, illicit and contraband cigarettes, FCV tobacco production of 325 million kgs in 2013-14 came down to 210 million kgs in 2019-20, it added.
 On the other hand, the entire legal cigarette value chain is presently reeling under penal taxation on account of continuous increases in excise duties and compensation cess on cigarettes, which have cumulatively gone up by over 200 per cent from 2011-12, FAIFA claimed.
 "As a result of high taxes and growth of illegal cigarette trade, legal cigarettes have dropped by more than 25 per cent between 2011-12 and 2018-19, while illegal cigarettes have grown by 31 per cent during the same period," it said. RKL RVK

FAIFA asks govt for tax policy that disincentivises illegal cigarette trade

<ul><li>The government's efforts have led to a reduction of 8.1 million smokers between 2009 and 2017. </li><li>Over 103 million adults and 625,000 <keyword id="6354493" type="ORGANIZATION" weightage="20" keywordseo="children">children</keyword> still smoke on a daily basis.</li><li><keyword id="3658" type="COUNTRY" weightage="20" keywordseo="India">India</keyword> needs to raise taxes further, crack down on illegal <keyword id="6361871" type="ORGANIZATION" weightage="20" keywordseo="tobacco">tobacco</keyword> sales and do a better job of implementing the guidelines of the National Tobacco Control Program. </li></ul>The WHO’s Global Adult Tobacco Survey estimated that the total number of smokers in India fell by 8.1 million between 2009 and 2017. Yet, 625,000 children still use tobacco in the country on a daily basis. According to the Tobacco Atlas, a report compiled by the American Cancer Society and Vital Strategies, <a href="https://tobaccoatlas.org/wp-content/uploads/pdf/india-country-facts.pdf">103.6 million</a> people in India over the age of 15 consumed tobacco every day as of 2015, 87% of which were men. The results indicate that over 20% of India’s male population smokes compared to 2% of its females. Worse still, the report shows that the habit starts at a young age. Over half a million children between the age of 10 and 14 years also smoke on a daily basis. Nearly 70% of this figure is accounted for by boys, which indicates that the proportion of female smokers could increase in the future. While the report maintains that there are fewer deaths from <keyword id="6357278" type="PERSON" weightage="20" keywordseo="Smoking">smoking</keyword> in India in comparison to countries with similar levels of human development, around 13,452 men and 4,435 women die every week owing to smoking-related issues, amounting to 930,000 annual deaths. The direct <keyword id="6354750" type="CITY" weightage="20" keywordseo="health">health</keyword> costs and indirect costs such as lost productivity were pegged at 1.8 trillion rupees. India has cracked down on tobacco use in recent years. The government has implemented measures such as a graphic pictorial warning that covers 85% of the package, higher duties on cigarettes and a ban on smoking in educational institutions, government facilities and hospitals. It has also made anti-tobacco advertising spots, which are distinguished by their appallingly low production value, a regular fixture at the cinema and on television. So, despite efforts by various governments, more work remains to be done. What can India do to further? “There needs to be greater intervention at the ground level,” according to Dr Srinivas Ramaka, a noted cardiologist and tobacco control advocate. He says that the government has fallen short in implementing the guidelines of the <a href="https://mohfw.gov.in/major-programmes/other-national-health-programmes/national-tobacco-control-programme-ntcp">National Tobacco Control Program</a> (NTCP). Under the guidelines, there should be a Tobacco Control Cell in hospitals at the district level, which offers counselling and medical services for patients who wish to quit smoking. Srinivas also cited the sale of illegal forms of tobacco, noting that it was an issue for the police to address. Even though gutka (oral tobacco) is banned, his patients are often able to buy the harmful mixture for as low as Rs. 5 in “loose form”, he said. India needs to do a better job of targeting bidis, which are hand-rolled cigarettes. Unlike most countries where cigarettes account for a high proportion of tobacco usage, branded cigarettes comprise only <a href="http://www.tiionline.org/facts-sheets/tobacco-consumption/">11% </a>of tobacco consumption in India, according to the Tobacco Institute of India. Srinivas said that the government needs to provide bidi-rollers with alternative modes of employment through skill training programmes. Tobacco cultivators should also be incentivised to grow different crops that offer similar margins, as per NTCP guidelines. Finally, taxes need to be raised on all forms of tobacco as the WHO states that this is one of the only proven ways to reduce tobacco consumption, especially among the poor, under its <a href="http://www.who.int/tobacco/mpower/mpower_report_six_policies_2008.pdf">MPOWER</a> policy. The Tobacco Atlas estimates that only 26.5% of a tobacco product’s retail price in India is attributable to excise taxes. The WHO says that at least 70% of the price of a pack of cigarettes should be covered by taxes. Being the second-largest consumer of tobacco in the world, India has the power to raise taxes on tobacco products further.

Despite government efforts, 625,000 Indian children still use tobacco daily

<keyword id="2974268" type="UNKNOWN" weightage="80" keywordseo="Illicit-market">Illicit market</keyword>, with respect to seven sectors of the <a href="http://www.businessinsider.in/searchresult.cms?query=manufacturing">manufacturing</a> industry, had led to a loss of Rs 32,239 crore to the exchequer during 2014, according to a report released by <a href="http://www.businessinsider.in/searchresult.cms?query=FICCI">FICCI</a>. 
 The <keyword id="6355001" type="CITY" weightage="80" keywordseo="FICCI">FICCI</keyword> report prepared by its Committee Against Smuggling and Counterfeiting Activities Destroying the <keyword id="34412" type="ORGANIZATION" weightage="80" keywordseo="economy">Economy</keyword> and titled “Illicit Market: A Threat to Our National Interest” released said the loss was inclusive of both indirect and <a href="http://www.businessinsider.in/searchresult.cms?query=direct+taxes+">direct taxes</a> -- Rs 34,020 crore and Rs 5,218 crore, respectively. 
 
According to the report, there was a loss of Rs 26,190 crore in 2012. 
 FICCI released its nine sector report titled 'Illicit Market: A Threat to Our National Interest' in Guwahati on Tuesday. This is a quantitative study evaluating the impact of illicit markets on various economic aspects of the <keyword id="6362048" type="ORGANIZATION" weightage="80" keywordseo="Manufacturing">manufacturing</keyword> industry, including sectors like <a href="http://www.businessinsider.in/searchresult.cms?query=FMCG">FMCG</a>, packaged foods and personal goods, computer hardware, automobiles, mobile phones, tobacco &amp; alcohol, and media and entertainment industry. 
 
The study found that the revenue loss to the <a href="http://www.businessinsider.in/searchresult.cms?query=central+government+">central government</a> due to illicit trade increased 49.8% to Rs 13,049 crore from 2011-12 to 2013-14. 
 
Amongst the various sectors, the maximum revenue loss was from counterfeiting and illicit trade is tobacco products—23% and Rs 9,139 crore. 
 When it comes to states, <keyword id="6354915" type="CITY" weightage="100" keywordseo="Assam">Assam</keyword> saw a significant growth in illicit trade in these sectors in the last couple of years. It was one of the fastest growing markets for illegal cigarettes and alcohol in the country. 
 
In 2014, illegal cigarettes accounted for more than 25% of the total cigarette market in the state. 
 
Assam's illegal market for alcohol too grew significantly in value terms, especially for IMFL and imported liquor. 
 "During the last twenty years, the volume of the counterfeiting activity has increased 100 times and the size of trade in counterfeited goods is 10% of the legal <keyword id="35028" type="ORGANIZATION" weightage="80" keywordseo="international-trade">international trade</keyword> (around 2% of the world's overall economic output)," said PC Jha, adviser, <keyword id="2974267" type="PERSON" weightage="60" keywordseo="FICCI-CASCADE">FICCI CASCADE</keyword>, and former chairman of the <keyword id="514301" type="ORGANIZATION" weightage="80" keywordseo="Central-Board-of-Excise-Customs">Central Board of Excise &amp; Customs</keyword>. 
 
Deep Chand, advisor to FICCI CASCADE and former Special Commissioner of Police, New Delhi, said: "In the past few decades, leading intelligence and law-enforcement agencies around the world have found conclusive evidence of the increasing involvement of terrorist organizations in counterfeiting, piracy and smuggling activities to fund their activities…The need of the hour is tangible actions to increase enforcement and to impose increased punishments." 
 
The study said that high state-level taxes like VAT and imposition of health cess on the legal cigarette industry is resulting in high prices for legal cigarettes, and this is the key reason for such an alarming growth of illegal cigarette industry in the state. 
 
Most of the manufacturers of such illegal <a href="http://www.businessinsider.in/searchresult.cms?query=cigarettes+">cigarettes</a> (mostly based in the surrounding states and in some northern states) evade the high central <keyword id="6356916" type="UNKNOWN" weightage="80" keywordseo="excise-duty">excise duty</keyword> and state taxes/cess and thus are able to offer their products to consumers at rock-bottom prices. Price of an illegal cigarette pack in Assam is a fifth of the price of a legal packet. 
 
According to the study, smuggled international contraband cigarettes contribute significantly to the alarming growth of the illegal cigarette industry in Assam. Assam shares a porous international border with Bangladesh. In addition, other states in the north-east also share a similar border with Myanmar, Bangladesh and China. Therefore, there is a sizeable influx of cheap king-sized smuggled cigarettes from across the border into Assam. 
 
These smuggled cigarettes are transported from Assam and other north eastern states to the rest of the country by air, bus and train, the report said. 
 
"Such illegal cigarettes defeat the tobacco control objectives of the government as they neither bear any health warnings required as per Indian laws nor have other mandatory declarations like MRP, date of manufacture or place of Manufacture. High VAT compared to the rest of the country and the recent imposition of health cess on cigarettes have also resulted in large-scale diversion of the cigarettes trade into the state," the report pointed out. 
 
(Image: Indiatimes)

Over Rs 39, 000 crore loss to exchequer in 2014 all thanks to illicit trade!

While presenting his third budget, Finance Minister Arun Jaitley did not change the tax slabs to bring more and more people under the tax net. 
 
Jaitley said the role of tax payers was important in nation building and each rupee contributed to sectors such as infrastructure, rural and social well being. 
 
The net revenue gain of Rs 19,610 crore was due to surplus from indirect taxes. 
 
He also announced a little relief for professionals and people staying in rented accommodations. 
 
He categorised taxation under 9 disciplines 
 
1. Tax relief to small tax payers: 
 
Jaitley announced relied for people staying in rented accommodation. The compensation in rent increased from Rs 24, 000 to Rs 60, 000 per anuum 
Presumptive income tax scheme to be extended to all professionals with income of Rs 50 lakh with presumption of 50% profit 
2.Boost employment and growth: 
 
Deduction in taxes under Skill Development by 2020 10% extra DDT on dividend recipients earning above Rs 10 lakh per annum, says FM in <keyword id="2783177" type="UNKNOWN" weightage="20" keywordseo="Budget-2016">Budget 2016</keyword> 
100% tax deductions for new startups for first 3 years 
More asset reconstruction companies 
Residency of foreign companies deferred by one year 
Exempt service tax on general insurance service under Nirmaya scheme 
Basic custom duty hiked 5%-6% 
3.Incentivise domestic value and make in India: 
 
4. Pension society: 
EPF: 40% corpus to be tax free 
Annuity income will be non-taxable 
Monetary limit 1.5 lakh per annum 
Government to introduce bill to amend Companies Act for ease of doing business; to enable registration of companies in a day 
 
Affordable housing: PM Awas Yojana to be strengthened 
100% deduction for undertaking flat of 30 sq metre, however, MAT will apply 
First home buyers: deduction for add 50,000 per annum to 35 lakh loans during next fiscal under Rs 50 lakh 
Investment in real estate: 
Exempt service tax on affordable housing 60 sq meet 
 
Add resource to more on farm, clean: 
 
Tax 10% at gross amount of dividend will be apd 10lkh/annum 
Raise surcharge 12% to 15% 
Purchase of luxury cars 
Levy infrastructure cess 1% LPG 2.5 diesel, 4% on high engine capacity and SUVs 
Branded excise duty above Rs 1, 000 goes up 6%-12.5% 
Hike in excise duty by 10-15% tobacco other than bidis 
Krishi Kalyan Cess of 0.5% on all taxable services: FM 
Clean Energy Cess to renamed as Clean Environment Cess 
 
Reducing litigation 
Tax evasion to be strengthened 
Jaitley came down heavily on black money 
3 lakh tax cases pending amounting to Rs 5.5 lakh crore. New dispute resolution scheme to settle case by paying disputed case interest. 
Levy of heavy penalty for non payment of tax has led to high litigation. Proposal to modify scheme for penalties 
 
Simplified taxation 
 
To reduce multiplicity of taxes and cascading - 13 taxes with collection less than Rs. 50 Crores a year abolished. 
Use of technology for accountability 
Income tax dept. will expand e-sahyog to assist small taxpayers 
Plan to use technology in Taxation department in a big way

Great news for the common man, no change in tax slabs but cess and excise duty hiked on several products

By Fakir Hassen Johannesburg, May 3 () Smokers in South Africa are livid after the government reneged on an earlier announcement by President Cyril Ramaphosa that the sale of the cigarettes will be allowed from May 1 as the country moved down to level four of a new five-level strategy to fight the COVID-19 pandemic.The sale of cigarettes was prohibited during the extended 35-day national lockdown that ended on April 30. The South African government said the decision to not allow the sale of cigarettes was taken after receiving comments from over 2,000 citizens."This was promoted by more than 2,000 public comments saying that they were opposed to the sale of cigarettes during the level 4 lockdown. We are a government that is responsive to people, even if it takes a decision and people say they don't like that decision," Minister of Co-operative Governance and Traditional Affairs Nkosazana Dlamini-Zuma said."I don't think you can say the measures we are taking to save people's lives are draconian," she said.The minister also expressed concern that the manner in which cigarettes were shared by often being passed around between smokers was not compliant with social distancing requirements, as it promoted the spread of the virus.South Africa has so far reported 6,336 cases of coronavirus with 123 deaths, according to wrorldometer.The continued prohibition came amid strong advice against it from economists and industry lobby groups because of the huge loss in excise duty from the sale of tobacco products."The ill-thought prohibition of cigarettes is impoverishing the nation, enriching criminals and destroying the public's faith in the lockdown," said Tax Justice SA founder Yusuf Abramjee."The Government is throwing away 35 million Rands every day in taxes at a time when its citizens are starving.Meanwhile, criminals are pocketing that money by luring South Africa's 11 million smokers to the black market," Abramjee said.He said this is life-endangering economic sabotage that hands trade to the organised syndicates."Illicit cigarettes are flooding the market at massively inflated prices, delivering no tax to the country and actively increasing the movement of people – the very thing the lockdown is supposed to prevent," Abramjee said.The changed stance on tobacco sales overshadowed other major concessions during the level 4 lockdown.Citizens may now leave their homes for exercise, including cycling, in a radius of less than five kilometres from their homes, provided they have masks on at all times.Gyms are still not allowed to open.People who have been stranded in other provinces and could not return home or to their employment in their hometowns since the lockdown started have been granted a one-off concession to travel. FH RUP RUP

Anger in S Africa as government reneges on sale of cigarettes during lockdown

Bhopal, Jun 22 () GST intelligence officials have detected tax evasion of Rs 105 crore by a cigarette manufacturing firm in Indore in the last one year, according to an official statement issued on Monday. The officials of the Directorate General of GST Intelligence (DGGI) here had conducted searches at the firm's premises last week that revealed that a secret exit had been set up on the rear side of the factory through which unaccounted raw materials were brought in and finished goods cleared, it said explaining the modus operandi. It was also found that the generator sets used for operating machines were manipulated to suppress production, the probe agency said. "Investigations conducted by the DGGI has unearthed a major tax/ duty/ cess evasion estimated to be about Rs 105 crore only for the period since April, 2019 till May, 2020," said the statement issued by the Additional Director General, DGGI Bhopal. Similar evasion is suspected to have been resorted to by the unit during remainder of GST and erstwhile central excise periods also, it said. "Hence the total revenue evasion, which would be clear only after completion of investigation, is suspected to be multiple times higher," the DGGI said. The financial investigations into the dealings of the mastermind, who was recently arrested by the DGGI in another case, has indicated that he had opened a media house in which he declared his circulation of newspaper copies at 1.2-1.5 lakh per day while actually circulation was only 4,000-6,000 per day, it said. "Thus, the mastermind of this fraud laundered huge amounts of illicit wealth (in cash) earned from illicit pan masala/ cigarettes business by declaring fraudulent sale of newspapers and also booked fictitious advertising incomes," the statement said. The DGGI said that, from the interrogation of the factory supervisor, accountant and other staff, it is estimated that less than five per cent of the production was accounted for since last many years. "Even for the accounted production, the major buyers (of these five per cent sale) have been found to be fictitious," it said. On June 19, the DGGI officials were also successful in locating one of the clandestine and unregistered godown used by the tax evaders to conceal the packing material containing specific brands of cigarettes such as K10 and A 10, the statement said. "Investigations have revealed that the seized packing material is sufficient to pack 5000 cartons (each carton containing 12,000 cigarettes) with estimated printed MRP of Rs 27 crore," it said. However, it is suspected that there may be a large number of other such clandestine and undeclared godowns in and around Indore which DGGI officials are attempting to locate, the statement said. The supplier of these two brands of packing materials has confirmed the unaccounted supply of about 1,500 cartons per month, it added. As part of 'Operation Kark', the DGGI Bhopal officials had conducted searches in the premises of over a number of pan masala/ tobacco dealers and distributors from June 9 to 12th, leading to huge seizures of clandestinely stocked non-GST paid pan masala/tobacco and detection of estimated Goods and Services Tax (GST) evasion of Rs 400 crore. The operation has been named 'Kark' -- considering the high Goods and Services Tax (Kar in Hindi) loss and the reported adverse effects of consuming illicit tobacco not subject to food and safety standards leading to high prevalence of oral cancer (Kark) in India. One of the masterminds and financial beneficiaries in this case was arrested from Mumbai on June 15. Further investigations revealed that he was involved in manufacture and supply of cigarettes from a unit in Indore. Data analysis by the DGGI officials indicated that this unit had paid a GST of only Rs 2.09 crore and Rs 1.46 crore in last two financial years, respectively. Based on further analysis and information collected, searches were conducted at five premises connected with this unit last week, the statement said. "The tax evasion syndicate in this case involves directors of the company, transporters, supporting manufacturers and raw material suppliers. Number of these persons are presently absconding and have not joined DGGI investigations," it said. AKV SMN

You Searched For "excise duty on tobacco" and got 12 results

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Despite government efforts, 625,000 Indian children still use tobacco daily

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Great news for the common man, no change in tax slabs but cess and excise duty hiked on several products

BI India Bureau

Anger in S Africa as government reneges on sale of cigarettes during lockdown

PTI

GST intelligence officials detect Rs 105 crore tax evasion by Indore-based cigarette manufacturer

PTI

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