Tobacco farmers seek balanced, uniform taxation under GST

The Federation of All India Farmers Association (FAIFA), representing millions of farmers and farm workers in the commercial crops sector, urged the government to not place cigarettes under the 28 per cent taxation slab. FAIFA General Secretary Murali Babu said the Goods and Services Tax should be an opportunity to remove tax arbitrage in tobacco taxation, thereby dis-incentivising illegal and contraband products – currently flooding the market at an alarming rate.  

“Illicit trade is controlled by anti-social elements, international crime syndicates and terror organisations, which result in huge cost to the nation, both financial and otherwise. We are sure that a pragmatic taxation policy will benefit the country,” said Babu. The tobacco grown in India is FCV (Flue-Cured Virginia) type. Exports are estimated to earn more than Rs 6,000 crore in foreign exchange with FCV tobacco alone contributing Rs 4,000 crore, said the Tobacco Institute of India. 

FAIFA said all efforts of the tobacco control programmes are largely focused on the FCV type of tobacco crop, which has boosted illicit trade in the country. FAIFA has appealed to various other ministries such as the Ministry of Health and Family Welfare, Ministry of Agriculture, Ministry of Commerce and Industry and Ministry of Labour, besides the Prime Minister’s Office, in this regard.