Fake-Cigarette Dealers Face Fire

The high decibel campaign against smuggled cigarettes has at last yielded result. In a country-wide swoop by the police, the state sales tax departments and the department of weights and measures of the Central government, traders supplying contraband cigarettes have been nabbed over the last few weeks.

Regulatory authorities have also sounded an alert in all major towns with notices being issued to retailers against stocking and selling of smuggled cigarettes.

According to official estimates, cigarettes worth Rs 10 lakh were confiscated in Andhra Pradesh alone. In Maharashtra, the police has conducted raids in Bhiwandi, Ulhasnagar, while the Rajasthan sales tax department has raided several wholesale traders in Jaipur.

 

Similar raids have been conducted by the weights and measures department against stocking and selling contraband cigarette in Indore, Satna and Nagpur and Bharuch.

Joint raids have also been conducted by the police and weights and measures department in Aurangabad and Nashik. The department has, in fact, issued notices to 5,000 retailers to stop stocking contraband cigarettes.

The brands of smuggled cigarettes, which are freely available, are Aziz Gold, Gold Leaf and Rider from Bangladesh and Gudan Garam from Indonesia. The Bangladeshi brands are available nearly 30 per cent cheaper from the Indian brand.

International premium brands Like Marlboro Lights, State Express 555 and Benson & Hedges are also being heavily smuggled, taking advantage of the recent phase-out of quantitative restrictions on cigarettes.

According to industry estimates, tax differentials between Saarc countries have created significant opportunities for cigarette smuggling. For instance, in Nepal taxes on cigarettes as per cent of manufactured value are only 83 per cent compared to 125 per cent in the country.

Retailers find it attractive to sell the contraband brands because the margins they earn on these are thrice than they earn on regular duty-paid cigarettes.

The scourge of smuggled cigarettes was mostly confined to certain port cities like Mumbai accounting for 45 per cent of smuggled cigarette sales. Recently, however, the network has spread to far flung areas such as Jaipur, Indore, Satna, Bharuch and various Andhra and Punjab markets.

Recently, the whole issue took a new turn with the Supreme Court directing the customs department to file replies within eight weeks detailing steps taken or contemplated to check the contraband cigarette trade in the country. The direction came after a public interest litigation to this effect was filed by an organisation called Women Action Research and Law for Women.