Duty on Smoking Products Increased by 10-20%

Published on April 14th, 2014 00:00
smokeless tobacco

Despite the arrangement, the government has raised the excise duty on smokeless tobacco products such as - pan masala, gunk and chewing tobacco by approximately 10-20% on several categories ahead of the Union Budget. Increase in tobacco duty was once a practice in Budget however this year, the government is planning to vote before proclaiming the elections.

Even so official resources revealed that the planning vote is not the cause and there could be duty increases when the new government exposes budget after its creation. Based on their findings, the sector is highly disorganized. Compounded levy plan is the approach of duty levy for the mentioned industry, initially integrated in 2008 and then in 2010 in a changed way.  After all in the final budget 2012, the duty on smoking products experienced sharp rise of 50% however the profit collection did not agreed to the rise. As a result the government began with fairly less amount of duty rise at the beginning of the year and adhering to the influence on duty collection from the sector might consider its subsequent step, stated sources.

According to the compounded levy system, excise duty is chargeable for considered production depending on the quantity of packing machines in the plant of the producer.  The department got several industry feedbacks that while some producers utilize local packing machine, numerous have used machines with higher capacity.

The matter increased regardless of whether excise duty can be re-determined depending on the rate of the packing machine and exact creation, which may be bigger than the considered production. At present, the obligatory compounded levy plan is applied to Pan Masala, Gutkha and chewing tobacco produced with the help of a packing machine. The aspect quite specific to the production on which excise duty is leviable is the quantity of packing machines set up in the plant of the manufacturer.

The month-to-month regarded output per operating machine per month is approved depending on the ordinary speed of packing machines and standard working hours of a plant.

By Joanna Johnson, Staff Writer.
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