The Hindu Business Line : Tobacco industry calls for continuation of AED regime

THE tobacco industry has sought the continuation of the single point taxation for the sector through the specific duty structure and additional excise duty (AED).

In its pre-budget memorandum for Budget 2005-06, the Tobacco Institute of India (TII) — which represents the organised segment of the industry — has called for a need to reduce the duty differential between cigarettes and other tobacco products and the exemption of the sector from the proposed value-added tax (VAT) regime.

"In case of the VAT is inevitable, implementation on cigarettes should be postponed by three to five years to allow the system to formalise. Vat should not exceed 4 per cent of the transaction value as determined under Section 4 of the Central Excise Act, 1944," the memorandum has said.

It has called for the removal of the National Calamity Contingent Duty, which was imposed as a largely a "temporary measure" in 2001-02.

The Institute has also called for the need to discourage State taxation.

"States levying taxes should be denied their share of AED," the memorandum has added.

The memorandum has also called for the need to contain sale of contraband cigarettes.

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