The Hindu : Tamil Nadu / Chennai News : Plea to exempt beedi industry from VAT

Online edition of India's National Newspaper
Sunday, Jul 02, 2006

Tamil Nadu

Tamil Nadu - Chennai

Plea to exempt beedi industry from VAT

Special Correspondent

The impost will increase in the price, says forum

CHENNAI: The All-India Beedi Industry Federation, a collaboration of five associations, has urged the Government to exempt the sector from value added tax and Central Excise.

Imposition of VAT on beedis would increase in the price, putting the product beyond the reach of the poor, said members of the federation, who met here on Saturday.

The Government should also alter its perception that machines were used in beedi manufacturing. "It is completely handmade, in the homes of our workers, and the Government must treat it as such," said A.M. Ashraf, president, Tamil Nadu Beedi Manufacturers Association. This would exempt the industry from Central Excise. The beedi industry was already flailing owing to falling prices and its inability to compete with the cigarette segment. Over the last three years, both production and sales had come down by 40 per cent.

"In the next 15-20 years, we are afraid the beedi industry may be wiped out, if certain concessions are not extended," Mr. Ashraf said. To reinforce the demands, the entire industry would strike work indefinitely until the grievances were redressed.

This would mean a loss of Rs.150 crore a day and between Rs.80 and 120 a day for every labourer, Rampriya Das of the federation said.

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