Happy that Budget didn't hike duties on cigarettes: KK Modi, Modi Enterprises
In an exclusive chat with ET Now, KK Modi, Modi Enterprises, says he is glad that the government is thinking of moderation in tax hikes on cigarettes.
KK Modi: Well taxes are increased every year and we are used to it but I am glad the government is thinking of moderation in tax increase.
ET Now: You think this was only because the GST is on the anvil and you could be taxed much more when the GST is rolled out?
KK Modi: We do not know but I think there is another factor that large amount of cigarettes are coming non-tax paid through smuggling and 20-25% of total production today in India or consumption is non-tax paid so if the government should not increase taxes so there is a lot of encouragement for people who smuggle cigarettes.
ET Now: So you are hopeful that given this kind of smuggling etc. that you are not going to fall in the highest bracket of GST it seems very difficult?
KK Modi: No, we may be highest but cess may not be too high. There are two component to GST, one is the luxury goods and second is cess. So cess should not exceed the excise duty.
ET Now: Since I have managed to catch this short interview with you there has been a lot of buzz about the FDI policy being rejigged with respect to tobacco, what is that going to mean for Godfrey Phillips?
KK Modi: I think that policy I do not know who is promoting it but that will make the disinvestment of the government in ITC more difficult. So I do not know they are aiming at Godfrey Phillips, it will not make any difference to us.
ET Now: It will not make any difference in your partnership with Philip Morris.
KK Modi: Will continue.
ET Now: So there have been also lot of buzz that you are rejigging a lot of the companies and there is going to be downstream investments etc. anything you like to tell us?
KK Modi: The business of tobacco is a long term business, people consume, there is a lot of new improvements in technology whereby less harmful products are going to be in the market so we see a bright future.
KK Modi: Well taxes are increased every year and we are used to it but I am glad the government is thinking of moderation in tax increase.
ET Now: You think this was only because the GST is on the anvil and you could be taxed much more when the GST is rolled out?
KK Modi: We do not know but I think there is another factor that large amount of cigarettes are coming non-tax paid through smuggling and 20-25% of total production today in India or consumption is non-tax paid so if the government should not increase taxes so there is a lot of encouragement for people who smuggle cigarettes.
ET Now: So you are hopeful that given this kind of smuggling etc. that you are not going to fall in the highest bracket of GST it seems very difficult?
KK Modi: No, we may be highest but cess may not be too high. There are two component to GST, one is the luxury goods and second is cess. So cess should not exceed the excise duty.
ET Now: Since I have managed to catch this short interview with you there has been a lot of buzz about the FDI policy being rejigged with respect to tobacco, what is that going to mean for Godfrey Phillips?
KK Modi: I think that policy I do not know who is promoting it but that will make the disinvestment of the government in ITC more difficult. So I do not know they are aiming at Godfrey Phillips, it will not make any difference to us.
ET Now: It will not make any difference in your partnership with Philip Morris.
KK Modi: Will continue.
ET Now: So there have been also lot of buzz that you are rejigging a lot of the companies and there is going to be downstream investments etc. anything you like to tell us?
KK Modi: The business of tobacco is a long term business, people consume, there is a lot of new improvements in technology whereby less harmful products are going to be in the market so we see a bright future.
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