Traders get past Rajasthan smoke barrier,a third of tobacco smuggled

An effort by the Rajasthan government to curb tobacco addiction in the state by doubling Value Added Tax on tobacco products seems to have gone up in smoke.

An effort by the Rajasthan government to curb tobacco addiction in the state by doubling Value Added Tax (VAT) on tobacco products seems to have gone up in smoke. In an indication of the blackmarket rampant in tobacco in the state,in just two operations recently,the Commercial Taxes Department has recovered close to Rs 1 crore in taxes and penalties from traders,while around hundred cases are presently under investigation.

We received information that tobacco products were being transported from neighbouring states where VAT is lower. In April we recovered Rs 49 lakh from 96 centres and in June Rs 47 lakh from 81 centres, Commercial Taxes Deputy Commissioner (Anti-Evasion) Gyana Ram said.

While VAT on tobacco products is 40 per cent in Rajasthan,probably the highest in India,in neighbouring states like Haryana,Madhya Pradesh and Punjab,it is around 20 per cent.

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According to records with the Commercial Taxes Department,highest recoveries have been made in Ajmer,Alway,Bharatpur and Pali districts of Rajasthan.

Tobacco wholesalers say the blackmarket trade is the only way they can now turn a profit. A wholesaler from Jaipur admits they have been getting in products from neighbouring states since April this year,saying this makes up at least one-third of the supply.

As the Rajasthan Police points out,transporting tobacco products is easier as compared to alcohol. According to a senior official,tobacco products are usually stored in a godown just across the border from Rajasthan and transported at night.

In this illicit trade,a truck enters Rajasthan carrying goods worth Rs 8 to 10 lakh but the product is distributed before entering an urban centre. Smaller couriers then transport individual boxes to traders, he said.

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According to Ram,the first raids were conducted in April. In the operation that concluded on April 7,we covered 96 centres,including 48 cities,out of which we booked 45 cases and recovered Rs 49 lakh. In the same operation,57 cases are presently under investigation, said the Deputy Commissioner.

In the second operation that concluded on June 21,covering 81 centres including 50 cities,the department booked 44 cases,recovering Rs 47 lakh,while another 37 are under investigation.