NEW DELHI: Tobacco crop needs to be treated like any other agricultural produce and the tax burden on legally manufactured tobacco products in India is adversely impacting its growers, the Federation of All India Farmer Associations said on Wednesday.
In its pre-Budget demand, Federation of All India Farmer Associations (FAIFA), which claims to represent farmers and farm workers of commercial crops across Andhra Pradesh, Telangana, Karnataka and Gujarat, asked for extension of benefit under RoDTEP (Refund of Duties and Taxes on Exported Products) to the tobacco sector.
"We urge the policy makers to be reasonable and fair in the upcoming union budget and do not take any steps that affects the legal domestic industry with severe consequences on tobacco farmers livelihood," FAIFA President Javare Gowda said in a statement.
FAIFA asked Finance Minister Nirmala Sitharaman "to treat tobacco crop like any other agricultural produce and not put additional burden of taxes on legally manufactured products in India as that would have an adverse impact on tobacco farmers".
Increasing tax arbitrage has made India the fourth largest illicit cigarette market in the world, it added.
FAIFA also said the growers want "extension of benefit under RoDTEP to the tobacco sector".
"This incentive is eminently aligned to the objectives of the Foreign Trade Policy and will also give a level playing field to produce of Indian farmers in the international market thereby bringing in forex and income generation to farmers," it claimed.