Sales tax on tobacco may go

The state government may remove sales tax from tobacco as demanded by the farmers.

Narendra Modi, CM, Gujarat, has given assurance to a representation made by MLAs lead by Dilip Patel that the state will soon take the decision favouring farmers. The group of MLAs will meet Vajubhai Vala, finance minister of the state, today to sort out the issue.

"We have made a representation to the CM about the rising uneasiness among the farmers. The CM has given us a verbal assurance to take a decision in this matter soon and we are meeting the finance minister on Wednesday as directed by him," said Patel.

Patel, himself a tobacco grower, is likely to lead a protest march on Wednesday.

In December, the state government had announced to slap sales tax at the rate of four per cent on tobacco with effect from December 1 following a judgment passed by the Supreme Court. The Supreme Court had ruled that if tobacco is used for industrial production, the state government has powers to impose market cess.

"According to the ruling of the apex court, tobacco used for industrial production is eligible for sales tax. However, the majority of farmers in Gujarat sale their produce to the producers in other states as raw material for bidi, gutka and making toothpaste. The imposition of sales tax is not rational," said a tobacco grower.

In the current season, farmers have grown tobacco in  40,000 hectare in Charoatar area, believed to be the biggest producer of tobacco in the state.

According to an estimate, about 150 truckloads of tobacco will be sent to other states during this season.