* Tobacco provides employment to 36 million people in India, including 6 million farmers. The livelihoods of over 45 million people are linked to it, including those involved in agricultural processing, trade, and exports.
* India is one of the world’s largest exporters of unmanufactured tobacco.
* Under GST 2.0, the government purchases raw tobacco from farmers, cleans it (separating leaves, removing stems, and dust), and grades it (by size). The GST on such traders has been increased from 28% to 40%, and an additional 18% excise duty has been levied.
* If the government imposes this tax burden on traders who process the raw tobacco purchased from farmers to make it market-ready, the economic burden on these traders will increase significantly, and they will not be able to offer fair prices to the farmers. This will directly impact the income of the farmers and their families.
* This also reflects the government’s double standards, as Finished Beedis attract an 18% GST, but the raw tobacco used in their production is subject to a 40% GST and an 18% excise duty. This has also confused the traders who buy raw tobacco from farmers and process and grade it.
* Therefore, the All India National Farmers’ Association and the Tobacco Producers and Traders Association, along with their farmer and trader members, have submitted their appeal to the Honorable Nirmala Sitharaman, the GST Council, and officials and politicians of the state governments of Gujarat, Maharashtra, Andhra Pradesh, and Telangana, requesting them to resolve this issue as soon as possible.