Virginia tobacco traders kept away from e-auctions for the second day on Friday to exert pressure on the Centre to scrap GST on tobacco leaves and unmanufactured tobacco.
Farmers made a common cause with the traders, and urged the Union Commerce Ministry to take up their concerns with Union Finance Minister Arun Jaitley and ensure relief for them at the July 18 GST Council meeting.
The GST would trigger a market fall at a time when they were saddled with over 20 million kg of non-marketed tobacco in the traditional tobacco growing areas of Southern Black Soil (SBS) and Southern Light Soil (SLS), feared a group of growers at the Ongole I auction platform. Raw tobacco remained untaxed ever since the former Prime Minister, Chaudhary Charan Singh, scrapped excise duty on it, said Ongole II Farmers’ Association president V.V. Prasad, and wanted Chief Minister N. Chandrababu Naidu to restore status quo.
Advice to traders
Meanwhile, Virginia Tobacco Growers’ Welfare Association president Ch. Seshaiah said the traders should collectively take up their concerns directly with the Centre and not make GST a big issue in the middle of the marketing season after committing to purchase 130 million kg in the State this year.
The Tobacco Board should complete the auctions within 100 days in the interest of the farmers who suffered on account of evaporation losses due to prolonging of the auctions, he added.
Farmers were at the receiving end when the larger pictorial warning was imposed when the auctions were going on in full swing the previous year and now the GST was being used as a pretext to drive down the prices of tobacco, especially of medium and low grade varieties, at a time when productivity had been affected because of water scarcity and Orabanche cernua weed infestation, said former Tobacco Board member Ch. Ranga Rao.
Meanwhile, traders’ representative Ch. Ravi Babu said the price of tobacco would go up every time it changed hands from one dealer to another in view of 28% GST on raw tobacco before export.
It may not be possible to claim input credit within six months as stipulated, as the time taken for export varied between 12 and 18 months in many case, he added.