Sunday, May 12 2024 | Time 22:08 Hrs(IST)
image
Business EconomyPosted at: Apr 23 2024 7:48PM


High taxation and extreme regulations undermine legal cigarette industry in India

Hyderabad, April 23 (UNI) The high taxation and extreme regulations have resulted the share of legal cigarettes in total tobacco consumption in the country has shrunk by 37 per cent to a mere 9 per cent at the present from 21 per cent in 1981-82, according to the Tobacco Institute of India (TII).
The Tobacco tax policy has many unintended consequences such as the steep increase in illicit cigarette volumes and the shift in consumption from legal tax-paid cigarettes to tax inefficient forms of tobacco consumption, defeating both revenue and public health objectives, the institute said.
As a consequence, the legal cigarette volumes have shrunk while the illicit volumes are on the rise, it said that the Legal cigarettes are the smallest constituent of tobacco consumption in India but bear the brunt of over regulation and excessive taxation.
Legal cigarettes account for just 9 percent of overall tobacco consumed in India and the remaining 91 per cent consumption is in the form of illegal cigarettes and almost 29 other tax-inefficient tobacco products such as bidis, chewing tobacco and Khaini, it said.
While legal cigarettes and a small proportion of bidi and chewing tobacco production is in the organized sector, the majority 68 per cent of tobacco consumption in India is in the unorganized sector which escapes all tax and regulatory oversight, the Institute said.
Despite a mere 9 percent share of tobacco consumption, legal cigarettes contribute 80 per cent of total revenue collected by the government, the institute said .
Taxes on Cigarettes increased at a CAGR of 15.7 percent between 2012-13 and 2016-17 and during the Union Budget 2017-18 and with the imposition of Goods and Services Tax (GST) in July 2017, the tax burden on cigarettes increased by as much as 20 per cent, it said.
The union Budget, presented in February, 2020, increased NCCD rates with an overall tax impact of 13 per cent. In the Union Budget of 2023-24 NCCD rates on cigarettes were further hiked by 16 per cent.
Cigarette taxes in India, of the most sold brand, as a percentage of per capita GDP, are amongst the highest in the world as per data provided in the WHO Report on the Global Tobacco Epidemic, it said.
This has made legal cigarettes in India amongst the least affordable in the World, providing a huge boost to Illicit Cigarettes.
Among the top five tobacco producing countries, India has the largest sized pictorial warning on packs at 85 per cent, followed by Brazil at 65 percent while USA, China and Zimbabwe have textual warnings only, the institute said.
China and the USA are also large cigarette consuming countries, together accounting for almost half of the global cigarette consumption.
India ranks 9th in the world, in terms of warning size, whereas the global average warning size is around 45 per cent, it added.
UNI KNR AKS
Please log in to get detailed story.
Tags: #High taxation and extreme regulations undermine legal cigarette industry in India
More News

Kottayam-Kochi Rubber Market Rates

11 May 2024 | 9:04 PM

Kottayam, May 11 (UNI) Following were the Rubber Market rates announced by the Rubber Board here today per quintal
KOTTAYAM
RSS FOUR: 18050
RSS FIVE : 17800
KOCHI
RSS FOUR : 18050
RSS FIVE : 17800
UNI PA GNK.

see more..
Flipkart and Bajaj Auto team up to drive sustainable deliveries with Green Machines

Flipkart and Bajaj Auto team up to drive sustainable deliveries with Green Machines

11 May 2024 | 3:16 PM

Kolkata, May 11 (UNI) Bajaj Auto Ltd, the world's most valuable two-wheeler and three-wheeler company, and Flipkart, one of India's leading e-commerce marketplaces, on Saturday announced a strategic partnership to accelerate the adoption of electric vehicles (EVs) in the latter's last-mile delivery operations.

see more..

11 May 2024 | 2:52 PM

Mumbai, May 11 (UNI) Union Bank of India (UBI) reported a 19 percent year-on-year increase in the fourth quarter standalone net profit at ₹3,310.55 crore, supported by growth in net interest income (NII) and a sharp decline in loan loss provisions.

see more..

India's factory output grows 4 9 pc YoY in March 2024: Govt data

10 May 2024 | 8:24 PM

New Delhi, May 10 (UNI) India's factory output measured in terms of Index of Industrial Production (IIP) grew 4.9% year-on-year (YoY) in the month of March 2024, data from Ministry of Statistics & Programme Implementation (MoSPI) showed on Friday.

see more..

Kottayam-Kochi Rubber Market Rates

10 May 2024 | 7:43 PM

Kottayam, May 10 (UNI) Following were the Rubber Market rates announced by the Rubber Board here today per quintal
KOTTAYAM
RSS FOUR: 18050
RSS FIVE : 17800
ISNR TWENTY: 15300
SIXTY PERCENT LATEX: 13210
KOCHI
RSS FOUR : 18050
RSS FIVE : 17800
INTERNATIONAL RATES (BANGKOK)
RSS One : Not Available
RSS Two : Not Available
RSS Three: Not Available
RSS Four : Not Available
RSS Five : Not Available
KUALALUMPUR
SMR TWENTY :13752($164.70)
SIXTY PERCENT LATEX : 12999($155.70)
UNIPA GNK.

see more..
image