The Federation of All India Farmer Associations (FAIFA) has called on the government to review the excise rates on tobacco products. FAIFA emphasized the need to adjust the rates to support domestic agriculture and deter smuggling. A stable taxation system is crucial for maintaining farmer incomes and safeguarding jobs in the industry.
The Ministry of Finance recently introduced new excise duty rules for tobacco products, ranging from Rs 2,050 to Rs 8,500 per 1,000 sticks. FAIFA expressed concerns that such a significant tax increase could lead to higher prices for consumers, impacting sales and ultimately affecting farmers’ livelihoods. This move might also disrupt the tobacco market in the short term.
Murali Babu, President of FAIFA, highlighted the government’s earlier commitment to maintaining revenue neutrality in tobacco taxation. He underlined the importance of this assurance for the farming community across India. FAIFA praised the government’s efforts to streamline GST rates, which had a positive impact on pricing.
FAIFA leaders pointed out that India already has one of the lowest legal cigarette prices globally in relation to per capita income. They warned that the recent tax hike could make legal products unaffordable for many consumers, potentially driving them towards illicit sources. FAIFA urged the government to design tax policies that do not penalize law-abiding citizens.
