Countering the call for higher taxes on tobacco products, the Tobacco Institute of India on Friday said high and discriminatory levies on cigarettes have led to unabated growth of illegal cigarettes in the country.
“Over the last three-and-a-half years, the incidence of central excise duty and State value added tax on cigarettes, at a per unit level, has increased by 98 per cent and 124 per cent respectively,” it said in a release.
This has exerted severe pressure on the legal cigarette industry while illegal cigarettes grow unabated and the overall tobacco consumption continues to shift to cheaper non-cigarette tobacco forms, it said.
Consequently, while the legal cigarette’s share of total tobacco consumption in the country has declined to 11 per cent now from 21 per cent in 1981-82, the overall tobacco consumption in the country has increased by 38 per cent during this period, it said.
The Tobacco Institute of India further noted that while the legal cigarette industry in India is in the organised sector and follows all regulations, the bulk of tobacco consumed in the country is largely produced in the unorganised sector which does not have compliance and enforcement.