Tobacco - Nexus between Tax Rate and Death calls for unconventional measures

In India tax on cigarettes which was more than 400% on ex-factory price has come down to about 150% ( including VAT). Cigarettes which attracted more than 70% of MRP as duty in early 80's has come down to around 35%. Industry profit post duty on length basis have increased from few hundred crores to thousands. There is massive evasion by suppression of production. There is total mismatch in VFC tobacco production vis a vis cigarettes production. The Export of VFC to Dubai has increased many fold. There is massive evasion of duty on imports of cigarettes due to classification and under valuation. Department is helpless. Government does not appear to be serious to curb consumption.
M. K. Gupta

M K Gupta 17/07/2015