New Delhi, Dec 7 (PTI) Farmers' body FAIFA today askedthe government to roll back hike in compensation cess oncigarettes to revenue neutral rates saying tobacco farmershave suffered Rs 3,300-crore loss in the last four years.
The Federation of All India Farmer Associations (FAIFA),which claims to represent farmers of commercial crops fromvarious states, including Andhra Pradesh, Telangana, Karnatakaand Gujarat, said they are "under extreme duress due to heavytaxation and adverse regulatory environment on the legalcigarette industry".
During the last six years, consumption of domestic FlueCured Virginia (FCV) tobacco has reduced substantially. Theexcessive taxation on cigarettes has given a huge boost tosmuggled cigarettes, the FAIFA said in a statement.
"This has resulted in drop in earnings of FCV tobaccofarmers which have shrunk cumulatively by more than Rs 3,300crore since 2013-14," it added.
Seeking government intervention, FAIFA President JavareGowda said,"The latest increase in taxation on account ofrevision in the compensation cess rates on cigarettes hasfurther increased the tax arbitrage opportunities availableand provided an enormous boost to smuggling syndicates furtherreducing the demand of home grown tobacco." The association's General Secretary Murali Babu said thehuge growth of illicit trade of cigarettes is a reflection ofthe unintended consequences of steep increases in taxation.
"We appeal to the government to roll back the taxincrease to 'revenue neutral levels', consistent with theGovernmentÂ’s stated objectives," he said.
Such a move will "help curb illicit trade and increasedemand of home grown tobacco, save our livelihood and arrestfurther loss of employment opportunities", Babu added.
In July this year, the GST Council had raised cess oncigarettes to take away an estimated Rs 5,000 crore annual"windfall" manufacturers could have reaped from lower GSTrates. PTI RKLMR.
This is unedited, unformatted feed from the Press Trust of India wire.