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New Delhi, Feb 2 () Farmers' body FAIFA on Sunday sought roll back of the proposal to levy additional duty on cigarettes, saying the hike in tax will have an adverse impact on the livelihood of already struggling tobacco growers.
While presenting the Union Budget for 2020-21, Finance Minister Nirmala Sitharaman proposed to increase the National Calamity Contingency Duty (NCCD) on cigarettes, hookah, chewing tobacco, snuff and tobacco extracts and essence.
"The hike in tax is a major set-back to the FCV (Flue Cured Virginia) tobacco farmers who have been fighting torrential and unseasonal rains this year in Andhra Pradesh and Karnataka.
"We did not expect such NCCD hike ..after you (Government) were made aware of our current situation through several representations..," Federation of All India Farmer Associations (FAIFA) said in a statement.
It is unfortunate that the finance ministry has not even responded to many of FAIFA's representations which were submitted personally by the farmers, it added.
"What more can a legal tax paying FCV tobacco farmer can do? It is a death bed to all the FCV tobacco farmers when trusting and relying on Government is not yielding the required results, whereas unorganised sectors like Bidi industry was free of tax burdens," the association said.
Steep increase in taxes on cigarettes has led to increase in illegal trade, including smuggling of such items.
"Tax increases since 2012-13 have led to a 36 per cent increase in illegal cigarette trade, increasing from 19.5 billion sticks in 2011 to 26.5 billion sticks in 2018," FAIFA noted.
It said that the government has already removed export incentives on tobacco, making Indian produce less competitive in the global market.
"This lack of support from the Government is resulting in reduction in crop size and farmers voluntarily exiting the FCV tobacco cultivation. In this backdrop, the present NCCD hike is levied only on tobacco and it is against the fundamental principles of GST, hence we request Hon'ble Finance Minister to reconsider and withdraw the NCCD hike on Tobacco," FAIFA said. MSS
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Withdraw additional cess on cigarettes: FAIFA

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

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, May 11 () Farmers body FAIFA on Monday urged the government to provide a rescue package for tobacco growers, saying the crop worth Rs 4,400 crore is lying unsold in the fields due to the coronavirus pandemic.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, said demand for tobacco has weakened due to declining volumes of cigarettes and other tobacco products as a result of prolonged lockdown.It also sought government intervention to reschedule crop loans for next two to three seasons, and allow farmers to repay the loans in splits of 30 per cent each per season."Failure to bail out the current duress for tobacco farmers will force many of them into debt trap which will virtually kill the ecosystem comprising of marginal farmers, workers, and people employed in handling and transportation activities while pushing the farmers to extreme measures," FAIFA President Javare Gowda said in a statement.FAIFA said in Gujarat 330 million kgs of tobacco worth Rs 2,700 crore is lying in the open fields as traders are not ready to pick-up the produce because the government has banned the sale of tobacco products.On the other hand, nearly 130 Million kgs of flue cured tobacco worth over Rs 1,700 crore is waiting to be sold as the auctions are moving at snail's pace, causing quality loss under prolonged storage, it added.Gowda further said, "We request the government to immediately start auctions in all the Tobacco Auction platforms".He said the government should also direct the Tobacco Board and other bodies to coordinate with FCV tobacco manufacturers, exporters and traders to facilitate reasonable prices (pre-COVID market prices) for FCV (flue cured virginia) tobacco produce at the auctions in Andhra Pradesh and Karnataka.Urging Finance Minister Nirmala Sitharaman to intervene "to reschedule crop loans for next 2-3 seasons", FAIFA General Secretary Murali Babu said the farmers must be allowed to repay the loan amounts in splits of 30 per cent each per season, while continuing the sanction of the regular seasonal loans."The decision will benefit millions of FCV tobacco farmers, their families and workers dependent on the industry, as they are already staring at burden of huge interests of non-institutionalized loans," he added. RKL BAL

Lockdown: Tobacco farmers seek rescue package, say crop worth Rs 4,400 cr lying unsold

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

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Withdraw additional cess on cigarettes: FAIFA

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FAIFA asks govt for tax policy that disincentivises illegal cigarette trade

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

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Lockdown: Tobacco farmers seek rescue package, say crop worth Rs 4,400 cr lying unsold

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

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