Hike in taxes on Tobacco will encourage smuggling

Reports about hike in duty on tobacco products may not persuade many to give up smoking because of high prices as it is one of the products which bears heavy burden of local and Central taxes, but will certainly be good news for those who smuggle international brands into India and manufacturers of counterfeit products as it would make their trade more attractive because of huge price difference between products of legitimate manufacturers and those who pay no taxes.

 

Smuggling of cigarettes has become a major security concern for many countries as outfits like Al-Qaida and Taliban’s are turning to illicit trade to finance their activities. According to U.S department of justice bureau alcohol, firearms and tobacco are some of the items which are used to fund the activities of terrorists. In some cases container loads of cigarettes have been intercepted by authorities.