Tobacco growers oppose introduction of VAT

Karnataka VFC (Virginia Flue Cured) Tobacco Growers' Association today strongly opposed the government's proposal to impose Value Added Tax (VAT) on Tobacco.

Association President B V Javare Gowda, in a letter to Chief Minister H D Kumaraswamy, released to the press here, contended that tobacco was produced at the farm level and was not a finished product. Any move to introduce VAT would reflect in the Tobacco price and the brand image of Mysore Tobacco would take a beating in the international market, he said.

The VFC tobacco or cigarette tobacco produced in Karnataka constituted around one third of the total VFC Tobacco grown in the country, VFC Tobacco, whose production was largely concentrated in 80,000 hectares of Mysore and neighbouring Hassan Districts, was the main source of livelihood for more than 50,000 farmers. It was a major commercial crop fetching the farmers nearly Rs 500 crore every year. There was no other suitable alternative crop for Tobacco in the region. If VAT was introduced the growers would not be in a position to recover the cost of cultivation. The tobacco buyers would also exploit the situation and put a heavy burden on the growers by offering low prices. Ultimately, the brand image of Mysore tobacco would be damaged at the international-level, he said.

He said Deputy Chief Minister B S Yediyurappa, who also holds the finance portfolio, had convened a meeting of representatives of the tobacco growers and concerned officials on May 4.