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Tobacco industry terms field study "motivated"

Press Trust of India  |  New Delhi 

The tobacco industry today termed as "motivated" a recent study, which had found tobacco products cheaper than essential food items, saying it was an attempt by anti-tobacco activists to "influence" policy-makers on the taxation issue during the forthcoming Budget Session.

Noting that anti-tobacco activists based their advices on the study which is not only "outdated" but also at "variance with more recent study by the WHO, Tobacco Institute of (TII) said the recommendations also "overlooked undesirable onsequences" of high and discriminatory taxation on cigarettes.

"The release of this study in media just before the Union Budget 2016-17 appears to be motivated and a deliberate attempt by anti-tobacco activists to misinform and influence policy-makers on tobacco taxation by basing their recommendations on a study which is not only outdated but is also at variance with a more recent study released by WHO itself in 2015.

"The recommendations made in the study also overlook the undesirable consequences of high and discriminatory taxation on cigarettes, the objectives of tobacco control in the country, government revenues and the livelihood of millions of farmers and others that are dependent on tobacco," TII said in a statement.

Seeking to reduce tobacco consumption in the country, a study commissioned by Health Ministry and WHO today recommended increasing tax on all types of tobacco products and withdrawal of tax exemption to 'bidi' manufacturers.

"Prices of tobacco products in the country have not increased substantially over time, thus making these products even cheaper than essential food items," the study said.

"It is important that a clarification is issued on this outdated study which is also at variance with a study on tobacco taxation released by WHO itself with more updated information in 2015.

"The timing of the release of the ISID/PHFI Study is questionable and appears to be a concerted attempt by anti-tobacco activists to create incorrect perceptions on Tobacco Taxation Policy in the country," it said.

The statement said that over the last three-and-a-half years, the incidence of Central Excise Duty and state VAT on cigarettes, at per unit level, has gone up cumulatively by 98 per cent and 124 per cent respectively which is exerting severe pressure on the legal cigarette industry.

First Published: Fri, February 19 2016. 21:07 IST