Special Correspondent

The memorandum highlights the socio-economic burden that VAT imposes on farmers

NEW DELHI: Leaders of the Federation of Farmers Associations, representing 14 cigarette tobacco growing associations of Andhra Pradesh and Karnataka, have submitted a memorandum at the Finance Minister's office expressing concern over the proposed imposition of VAT (value--added taxation) on tobacco from the next financial year.

The representation highlights the tremendous socio-economic burden that VAT will impose on the farmers.

The farmers said cigarettes were already a highly taxed product, attracting excise and State taxes close to 140 per cent, a statement said.

Tax on tax

"Till now the tobacco farming community has not fallen a victim to the mass suicides of farmers which have been pervasive in Andhra Pradesh and Karnataka. The imposition of VAT on cigarette tobacco which is nothing but a tax on tax will seriously threaten the livelihoods of around seven lakh cigarette tobacco farmers and 30 lakh family members in Andhra Pradesh and Karnataka. Past experience tells us that a significant increase in tax on cigarettes has resulted in a drastic drop in income of cigarette tobacco farmers," Sivaram Prasad, General Secretary, Tobacco Growers Welfare Association said.