India 5th Largest Consumer of Illicit Cigarettes

Source from:  WebIndia123 03/28/2016

There has been a sharp rise in the number of illicit trade in cigarettes in India making it the fifth largest consumer of this tobacco product in the world resulting in revenue loss of more than Rs 9000 crore to the government.At present, 22 billion cigarettes sold in the country are illicit which constitutes more than 21 per cent of legal cigarettes sale market in the country.

According to official statistics, there has been sudden increase in the value of seized illicit cigarettes under Customs Act which increased from Rs 20.11 crore in 2013-14 to Rs 89.38 crore during 2014-15.

 According to Central Excise Department, , the value of seized cigarettes rose from 0.8 crore in 2013-14 to Rs 4.69 cr during 2014-15.The ministry of Health and Family Welfare has denied that strict rules may contribute in determining the level of illicit trade but ministry of Commerce has opined that excessive tobacco warnings may give rise to sales of illicit tabacco products in the country.

According to findings, smuggling of cigarettes through cargo, passenger baggage as well as courier modes have increased considerably. Another reason in rise in its illicit trade is Central excise duty.Only 12.52 per cent of the total tobacco production in the country is being utilised for manufacturing cigarettes, the excise duty from cigarettes as a proportion of overall duty on tobacco products constitutes about 87 per cent of the total excise value for 2014-15.

To curb illegal cigarettes trade, there are two agencies, '' Customs Department--- which can seize the illicit material at the border of the country and the other agency is Excise department which ensures that when products leave the factory , it is in accordance with the rules. Other factors which contribute to this illegal trade are--- corruption, weak enforcement, lack of official legislation and sanctions, growth in illegal distribution networks among others.Recognising that cigarettes are another name for 'cancer' and ultimately 'death', the government has issued pictorial as well as written warnings on all tobacco products but people hardly adhere to it resulting in 31 per cent rise in sale of illicit cigarettes in the country after implementation of pictorial warnings in India in 2008. Enditem