Growers in Prakasam dt. say ‘no’ to GST on tobacco

Farmers from SBS and SLS regions to stall auctions today

June 11, 2017 12:03 am | Updated 12:03 am IST - ONGOLE

Woes continue:  A tobacco farmer waiting for buyers at the Ongole II auction platform.

Woes continue: A tobacco farmer waiting for buyers at the Ongole II auction platform.

Farmers in the traditional tobacco growing areas in Prakasam district on Saturday took objection to the Centre’s decision to impose 5% GST on tobacco leaves and 28% on unmanufactured tobacco.

Farmers from 12 auction platforms in the Southern Black Soil (SBS) and the Southern Light Soil (SLS) regions, at a meeting here, feared fall in the market with traders passing on the GST burden to them.

Making a common cause with the manufacturers and traders, the farmers from the SBS region deferred their decision to stall the auctions on Saturday to Monday to facilitate participation of their counterparts in the SLS region in the protest.

‘Maintain status quo’

“We will intensify our stir if the Centre turns a deaf ear to our pleas to maintain status quo and save the growers and farm labourers,” they told reporters soon after the meeting.

“There is no remunerative price for any of our produce such as chilli, bengal gram, subabul and eucalyptus. The tax on tobacco will force the manufacturers and traders to drive down the prices of tobacco. About 24 million kg of tobacco is yet to be marketed,” said farmers’ association president from Ongole II platform V.V. Prasad.

This year, they grew tobacco much against odds after two consecutive bad cropping seasons. The production fell to six quintals per acre on an average as against the normal 10 quintals due to prolonged dry spell.

The growers incurred additional cost to provide life-saving irrigation through water tankers, explained farmers’ association president from Ongole I platform S. Gurava Reddy.

‘It’s unfair’

Meanwhile, Indian Tobacco Association president M. Umamaheswara Rao said: “Bringing the whole tobacco sector under the GST regime is unfair as tobacco crops used for making bidis and other products are not brought to the auction platforms, but sold in the local markets in an unorganised manner. Achieving GST compliance in the remote villages, where non flue-cured Virginia tobacco is marketed, is impractical,” he said.

Tobacco produced elsewhere in the country also comes to Andhra Pradesh for processing and export. Paying taxes in different States and getting refund after export would be a Herculean task, as a majority of the exporters were medium and small-sized, who take 12-18 months for shipment after getting export orders, he explained.

Locking funds for a long time would cost the exporters heavily and make international bidding uncompetitive due to high interest cost, he argued.

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