Trading in tobacco, the principal commercial crop in Prakasam district, was suspended on Monday as farmers withdrew their produce from the market in protest against imposition of GST by the Centre.
With no relief announced at the GST Council meet on Sunday, farmers stalled e-auctions in the Southern Black Soil (SBS) and Southern Light Soil (SLS) regions as they feared that the GST of 5% on tobacco leaves and 28% on unmanufactured tobacco would bring down the prices for various grades at a time when they were hoping to at least break even if not making some handsome gains. The farmers submitted a memorandum to the Centre through the Tobacco Board to reconsider its decision fearing that the GST might trigger 20 to 30% reduction in prices from the average market price of ₹139 per kg now.
In a farmer-friendly move, the then Prime Minister Chaudhary Charan Singh had withdrawn the excise duty on raw tobacco in the interest of millions of farmers and labourers, recalled a group of farmers at Ongole II auction platform. “We will have no option but to intensify our stir if the Centre does not consider our plea favourably at its next meeting on June 18,” said P. Venkateswarlu, a farmer leader.
Farmers grew tobacco under drought conditions with no other viable economic alternative in the district, explained another farmer leader P. Veeraraghava Rao from the Tangutur auction platform.
‘Refund not viable’
Pouring out their woes, a group of farmers at the Ongole I auction platform said tobacco being an agricultural commodity had been exempted from all taxes so far.
Prolonged dry spell and parasitic weed infestation had hit productivity this year and GST on tobacco had come as a bolt from the blue, said yet another farmer leader S. Gurava Reddy.
Meanwhile, Indian Tobacco Association president M. Umamaheswara Rao felt imposing GST and refunding the same after exports and allowing concessions on input to manufacturers would be a ‘futile’' exercise.
Claims of GST refunds would be very complicated, he felt.
