Tobacco kills nearly 1.3 million adults every year from TB and Cancer

Tobacco companies have defrauded Govt of India of Rs390.38 crore: REACT

Nabaz-e-Punjab, Mohali, March 2:
During the launch of study report on ‘illicit tobacco trade in India’, REACT (Research Action for Tobacco Control), a network of independent researchers, claimed that the tobacco companies have defrauded the government for Rs 390.38 crore. In this regard, a press conference was held in Mohali where Opinder Preet Kaur Gill, director of Generation Saviour Association, Dr Rakesh Gupta, Surinder Verma, and Dr Surila (all working for REACT) shared various facts about the illicit tobacco trade in the country.
They said that tobacco use is the leading cause of death and disease in India and kills more than 1.3 million adults every year, mainly from TB and cancers. The myriad forms of chewed and smoked tobacco products consumed in India are incredibly affordable because of weak taxation policies and lax regulations on the tobacco trade. As a result, legal tobacco products are cheap. Still, a massive illicit and unaccounted trade in tobacco further depresses the price of these products.
The REACT study report reads that India’s tobacco industry maintains that illicit trade is undertaken by a handful of unscrupulous actors who trade in foreign brands. It has no role in smuggling and counterfeiting. REACT reviewed all publicly available government sources like The Comptroller and Auditor General of India (CAG); Directorate of Revenue Intelligence (DRI); Central Board of Indirect Taxes and Customs (CBIC), and Parliament reports, and found tobacco companies have consistently evaded paying taxes or under-reported revenues to defraud the government. Some domestic unscrupulous tobacco companies have also been found complicit in other illegal trade within India and may be linked with the smuggling of drugs, counterfeit currency and arms. All these together threaten not only public health but also national security.
The study found at least 108 CAG reports between 2009-2018, showing that the tobacco industry uses various means to avoid paying taxes and selling its products illicitly. The CAG reports alone found that tobacco companies have defrauded India’s Government for at least Rs 390.38 crore in this period. The DRI reports also mention massive quantities of illicit cigarettes seized from Maharashtra, hundreds of tonnes of tax-evaded betel nuts from Andhra Pradesh and large amounts of pan masala, most trafficked using trains and railway stations. Central Board of Indirect Taxes and Customs (CBIC) reports showing a clear pathway of illicit trade of imported and domestically produced tobacco products and, in particular, cigarettes. Most movement of illicit products occurs through India’s extensive railway systems. A recent reply by the Minister of State of Finance in the Parliament said that 189 cases of evasion of excise and customs duty are greater than Rs 100 crore. And of these, at least 25 cases (14%) were by tobacco companies. Earlier Parliament replies revealed links between major gutka and pan masala manufacturers and the Bombay underworld.
Opinder Preet Kaur Gill, while releasing the REACT report, said, “All tobacco kills, whether it is legally manufactured or illegally traded. Poor taxation policies and a freehand to manufacturers have given a free hand to anyone to set up a tobacco unit or a shop. There is virtually no regulation. Prime Minister Modi’s dream of TB-free India cannot happen with the rampant growth of legal and illegal tobacco trade in India”.
Dr Rakesh Gupta, President SIPHER, said, “The government loses crores of rupees due to untaxed and smuggled tobacco. It is also well known that tobacco use is a gateway for other more serious addictions in the state.”
The REACT report recommends that the state government adopt vendor licensing with provisions for the license being par with alcohol and other restricted items to reduce the illicit tobacco trade.