Abolish tobacco cess to boost exports: ITA

The Indian Tobacco Association (ITA) has asked the government to abolish agriculture produce cess and Tobacco Board cess to give a fillip to exports, an association official said on Tuesday. Tobacco exporters have to pay around Rs 5.25 million in cess, the official said.

"The cess has been impeding India's tobacco exports. We have asked the government to do away with the provision," the official said.

The cess is levied and collected by Tobacco Board as customs duty under the Tobacco Cess Act of 1975. Currently, it is imposed on all tobacco exports.

"The cess is increasing our transaction cost, causing multiple delays in documentation and raising paper work. It takes months to submit papers to the customs department and in turn it takes time at the ports for verification of papers cleared by the customs department," the association said.

Tobacco consignments for overseas markets are shipped from Guntur in Andhra Pradesh, while the customs documentation is done in Chennai, leading to a 14-day delay, the official said.

Many countries, especially in the European Union, heavily subsidise tobacco growers. India's tobacco exports were at 97,809 tonne during April-October this financial year compared with 87,739 tonne a year ago. Exports are mainly to Western Europe.