FFA demands not to implement VAT on tobacco

New Delhi, Dec 22 (UNI) The Federation of Farmers Associations (FFA) has demanded the Government not to impose value added tax (VAT) on tobacco from the next financial year, as cigarettes are a highly taxed product, attracting an excise and state duties close to 140 per cent.

The associations, representing 14 cigarette tobacco growing associations of Andhra Pradesh and Karnataka, submitted a memorandum to the Finance Minister and highlighted the tremendous socio-economic burden that VAT would impose on the farmers.

''The imposition of VAT on cigarette tobacco will seriously threaten the livelihoods of around seven lakh cigarette tobacco farmers and thirty lakh family members in Andhra Pradesh and Karnataka,'' Tobacco Growers Welfare Association General Secretary Sivaram Prasad said.

Mr Prasad said the consequent rise in price of cigarettes is bound to increase unemployment, crime rate and poverty in the cigarette tobacco growing regions in Andhra Pradesh and Karnataka.

''A rise in the price of cigarettes will invariably cause an increase in the inflow of contraband which is already costing the Government around Rs 2,000 crore in the form of revenue losses,'' said B V Javaregowda, Member, Tobacco Board, Ministry of Commerce.

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