Smuggling of foreign brands of cigarettes on the rise
There is an alarming increase in smuggling of foreign brand cigarettes, if seizure data from April 1 to the date is any indication.
Seizures in the first four months of this fiscal year are already more than double those of the entire 2013-14 fiscal year.
According to information compiled by the Ministry of Finance, total seizures during the current fiscal year (April 1 to date) amounted to 5.58 crore of foreign brand cigarette sticks.
For 2012-13, 2013-14 and 2014-15, the figures were 5.18 crore, 2.64 crore and 11.43 crore respectively.
Officials admitted that “there appears to be a surge in the smuggling of foreign brand cigarettes.”
The increase in smuggling is largely attributed to higher import tariffs, which currently average around 90 percent.
At the same time, this year’s budget provided for an increase in the specific rate of central excise duty in the order of 17 to 29 per cent, subject to the length of the cigarette stick.
“There will certainly be a price difference, because there will be no duty on items brought in illegally. But that is not “the” reason for the smuggling, “an official said.
He said that although cigarettes can be imported under the “general open license” (where importers do not have to fulfill any export obligation after paying the duty), the conditions attached to the license are not easy to follow. to fill.
“There should be an illustrated warning on every package, as required by domestic manufacturers. Then the price should be printed in Indian currency. After that, an imported shipment is subject to high duties and countervailing duties, which makes it uncompetitive with domestically produced cigarettes, ”he said, adding that this paves the way for smuggling. .
Foreign cigarette brands are mainly smuggled from China, Myanmar, Nepal, Bangladesh, Indonesia and Pakistan. Brands such as Gudang Garam, Luvin Fresh or Djarum Black are popular among young people, prompting people to smuggle them.
Recently, customs officials have found some of these brands in the domestic market with the local price printed on the packages.
Later, they realized that these prices were not printed after legal imports but after smuggling, to pass them off as legal.
Another official said that while porous borders on road and sea routes facilitate smuggling, the method of controlling very few large shipments containing paper, plastic or wood items also encourages smuggling.
He said the customs field formations, as well as the Tax Intelligence Directorate, have been sensitized and urged to carry out in-depth container checks on a more haphazard basis, even on very small intelligence information.