'Reduce GST as beedis exported to Europe, Gulf and US'

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SME Times News Bureau | 23 Feb, 2022
Indian beedis are being exported to various countries, said officials at a panel discussion and therefore on the need to reduce the Goods and Services Tax (GST) tax rate on the product from 28 per cent.

Industry officials said beedis are exported from India to the Gulf Countries, Singapore, West Indies, the Netherlands, France and even to the US.

However, the panelists from different walks of lives pressed for reduction in the GST rate.

According to them, the 28 per cent tax rate has resulted in beedi production moving from organised to unorganised segment affecting the women workers and other marginalied sections as they are deprived of benefits like contribution to Provident Fund, paid leave, bonus, gratuity, insurance and others.

Speaking at a panel discussion Dr Ashwani Mahajan, National Convener, Swadeshi Jagran Manch said: "High GST on beedis is detrimental to both the industry and the workforce. The production of beedis in India provides employment to nearly 90 lakh to one crore people. A majority of the workers are women who live in Maoist dominated areas where no alternative job opportunities exist."

He said it is critical to reduce the tax on beedi or else the industry will face the risk of cheap cigarette imports from China.

According to Arjun Khanna, Joint Secretary, All India Beedi Industry Federation, the industry has been playing a big role in generating revenue and employment in some of the remotest regions of India and a high tax rate will result in unemployment and socio-economic ramifications.

Panelists said the high tax rate will result in tax evasion and capture of branded beedi market by cheap unorganised players.

"Beedi is an indigenous man-made product which has become the primary source of income for well over 20 lakh families in Bengal. The shutting down of the beedi industry will result in a severe impact on the livelihood of these families as no other alternatives have been provided to these families by the Central Government," Khallilur Rahaman, Member of Parliament, TMC said.