Lok Sabha Question No. 2805 (UNSTARRED), answered on 2020-03-11
Subject: Compulsory Licensing of Tobacco Products
Ministry: COMMERCE AND INDUSTRY
Asked by: Sangamlal Kadedin Gupta, Ramdas Chandrabhanji Tadas

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

UNSTARRED QUESTION NO. 2805.

TO BE ANSWERED ON WEDNESDAY, THE  11 TH   MARCH, 2020.

## COMPULSORY LICENSING OF TOBACCO PRODUCTS

## 2805.  SHRI SANGAM LAL GUPTA: SHRI RAMDAS C. TADAS:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

वाणिज्य

## एवं उद्योग मंत्री

- (a) whether post de-licensing in the year 1999, only five industries are covered under  mandatory  licensing  and  this  includes  production  of  cigars,  Tobaccolaced cigarettes and alternatives of tobacco;
- (b) whether hundreds of small scale factories across the country are manufacturing    cigarettes  without  having  the  compulsory  licence  and  if  so, details of the actions being taken by the Government in this regard;
- (c) whether  most  of  such  illegal  manufacturers  also  evade  tax  payment  as  a result  of  which  the  Government  is  incurring  a  revenue  loss  of  nearly Rs.13,000 crores every year; and
- (d) the  details  of  efforts  being  made  by  the  Government  to  check  such  illegal trade of cigarettes and tobacco products?

## ANSWER

## वाणिज ् य एवं उद्योग मंत्री ( श्री पीयूष गोयल ) THE MINISTER OF COMMERCE & INDUSTRY (SHRI  PIYUSH GOYAL)

- (a) & (b): With progressive delicensing of industries only four industries are now covered  under  mandatory  licensing.  Licensing  for  manufacturing  of Cigars and Cigarettes of tobacco and manufactured tobacco substitutes (Cigars, cheroots, cigarillos, and cigarettes of tobacco or of tobacco  substitutes)  are  granted  under  the  IDR  Act,  1951.  Tobacco Board of India as per Section 11(A) of the Tobacco Board Act, 1976 grants registration to manufacturers of Cigarettes under the category of 'manufacturers of Virginia tobacco'. About 17,000 units are registered in this sector with Ministry of Micro, Small and Medium Enterprises also under  their  2015  notified  scheme  of  Udyog  Aadhar  Memorandum (UAM) in UAM portal with NIC Code 12.

(c): As  per  the  information  received  from  Department  of  Revenue,  the details of tax evaded by Cigarettes and Tobacco Manufacturers/Traders are as below:-

(Amount in Rs.  Crore)

| Year               |   No. of cases booked against manufacturers/ traders of cigarettes and tobacco |   Quantum involved |   Recovery |   No. of SCN issued |   No. of arrests made |
|--------------------|--------------------------------------------------------------------------------|--------------------|------------|---------------------|-----------------------|
| 2016-17            |                                                                             16 |             193.33 |       0.1  |                  10 |                     2 |
| 2017-18            |                                                                              6 |             165    |       1.64 |                   3 |                     0 |
| 2018-19            |                                                                             68 |             136.32 |      89.74 |                  27 |                     1 |
| 2019-20 (Upto Feb, |                                                                             63 |              70.3  |      22.61 |                  13 |                     0 |
| Total              |                                                                            153 |             564.95 |     114.09 |                  53 |                     3 |

(d): Anti  Evasion/Preventive  checks  are  regularly  carried  out  in  these commodities resulting into booking of tax evasion cases.

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