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Tobacco farmers ask government for inclusion in the RoDTEP export promotion scheme

Tobacco farmers ask government for inclusion in the RoDTEP export promotion scheme

Tobacco exporters have asked the government to extend the duty refund scheme RoDTEP to the sector to boost outbound shipments.

A farmer dries tobacco leaves at a farm on the outskirts of Sanand, near Ahmedabad (AFP)

Why are tobacco exporters asking to extend the scheme?

In a meeting with Commerce and Industry Minister Piyush Goyal in Hyderabad on June 29, traders submitted that tobacco exporters are not covered under any scheme that provides export incentives.

They “requested to extend support to tobacco exporters by including them under the RoDTEP scheme,” the ministry said in a statement.

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They also requested the government help in curtailing the unauthorized production and use of chewing tobacco in India due to which there is a huge loss to the government exchequer, it added.

They also informed that there is an increase in illicit cigarette sales.

What is the RoDTEP scheme?

The scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) provides for refund of taxes, duties and levies that are incurred by exporters in the process of manufacturing and distribution of goods and are not being reimbursed under any other mechanism at the centre, state, or local level.

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In the meeting, Goyal informed that the export value of un-manufactured tobacco and tobacco products surpassed all the records at 12,005.80 crore (USD 1.5 billion).

What problems are tobacco farmers facing?

The participants also flagged the problems being faced by tobacco farmers in tobacco production such as shortage of labour, lack of assistance for farm mechanization, higher cost of sulphate of potash (SOP) fertilizer, penalty on excess tobacco production, increased fuel cost for tobacco barns and sought necessary technological/financial assistance from the government.

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He has assured to address the issues of the tobacco farmers and industry.

Goyal said that all efforts will be made to waive the penalty on excess tobacco produced by the farmers this year. He added that the period of validity of registration will be increased from 1 year to a period of 3 years.

This will be available for all tobacco farmers in the upcoming season.

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