The Federation of All India Farmers Associations (FAIFA) urged the Health and the Finance ministries to levy low taxation on tobacco crops under the new GST regime as it will affect the economic condition of the farmers.
The livelihood of nearly 4.6 crore farmers depends on the tobacco crop, which already sees imposition of high taxation due to the health problems caused by it.
“GST is a once in a lifetime opportunity for the government to remove anomalies in tobacco taxation in India and bring a fair relief to the tobacco farmers without compromising on its tobacco control goals,” said Murali Babu, General Secretary, FAIFA in a statement.
“The last prevailing taxation framework has been taking away livelihood of FCV (Flue-Cured Virginia/Traditional) tobacco farmers and has promoted smuggling of cigarettes which has reached alarming levels,” he added.
Apart from Health Minister J.P. Nadda and Finance Minister Arun Jaitley, FAIFA, which represents millions of farmers growing commercial crops, has written to the Prime Minister’s Office, Ministry of Agriculture and Ministry of Commerce and Industry.
According to FAIFA, while most industry segments are cheering and eagerly waiting for an early roll-out of GST, the FCV tobacco farmers are concerned that it should not spell doom for their livelihood.
The farmers have urged the government not to discriminate against the tobacco growers under GST.
“GST is an opportunity to remove tax arbitrage in tobacco taxation and disincentivise illegal and contraband products which have been flooding the Indian market. GST is also an opportunity to remove discrimination among various classes of tobacco farmers. There should not be any discrimination among cigarette, bidi, chewing tobacco farmers,” said Babu.
This labour-intensive crop which provides livelihood to 4.6 crore farmers and farm labour besides retailers and bidi workers etc. has been witnessing a continued onslaught in terms of punitive and sustained increase in taxation and impractical regulations over the past few years now.
FAIFA said that for the first time in independent India, 22 FCV farmers have committed suicide in Andhra Pradesh, Telangana and Karnataka.
According to the FAIFA General Secretary, the suicides of tobacco farmers were a result of the excessive increase in the excise duties levied on tobacco products.
Stating that no other country in the world has a huge and widespread dependence on the tobacco crop for livelihood, FAIFA said the ongoing distress of the farmers and others dependent on tobacco for their livelihood makes it very important for policy makers in India to strike a balance between the country’s excessive cigarette taxation and regulations and the livelihood of people.
“The socio-economic importance of tobacco and its employment-generation capacity should not be overlooked while framing tobacco taxation and regulatory policies in India,” said Babu.