With the mushrooming growth of illegal cigarette trade, itinerant vendors have long been a fixture in some parts of the metro cities in the country. The national Capital is no exception. The black market for loosies (slang for loose illegal cigarettes) is thriving on the streets, be it a commercial hub or posh residential locality in the Capital, where these vendors sell such cigarettes in violation of law.
According to Government data, 1.15 crore cigarette sticks were seized by the Customs Department in 2013-14, and the number shot up to a whopping 11.83 crore in 2014-15.In fact, the overall market for illegal cigarettes in India is now estimated to be about 23 per cent of the cigarette industry, up sharply from 19 per cent last year, resulting in a huge revenue loss to the tune of over Rs 9,000 crore to the national exchequer, according to the FICCI’s CASCADE report.
Delhi and NCR are emerging as one of the biggest and fastest growing markets for illegal cigarette trade in the country. As per an industry estimate, over 60 million illegal cigarette sticks are sold in Delhi and its adjoining areas every month. The illegal cigarette trade consists of tax-evaded domestically-produced cigarettes and contraband cigarettes which are smuggled inside the State from other countries.
“It is an alarmingly large and well-organised business in India. Consequently, the Delhi Government suffers an annual tax loss of over `200 crore,” said PC Jha, Advisor FICCI Cascade and former Chairman of Central Board of Excise & Customs.According to highly-reliable sources, many illegal cigarette industry owners have been using their business tricks to woo jobless youth into this illegal trade. “Generally, kingpins of such illegal trades offer jobs to gullible youths with hefty incentives to market their products throughout the country,” sources said.
“If you want to grow in this business, you need to shell out some money to earn big bucks. So we are hiring jobless guys with hefty incentives and gifts to earn good money and maintain a respectable status living,” an illegal cigarette trader told The Pioneer on condition of anonymity.The modus oprandi of this business is simple. It has been observed that vendors mostly target their key areas near restaurants, bars and playgrounds, and outside hospital entrances. According to sources, these cigarettes are available in every posh pan shops not only in the Capital but almost all metros in the country.
“As illegal brands are gaining popularity and becoming dominant brands in the Capital and NCR, most popular brands such as No 10, Ok10, Eleven10, Clock10, India 10, Porai, Ruly River, Shooter, Black etc have emerged as big players with a large consumer base,” sources said. These cigarettes are also cheaper by around Rs 40 a pack or even less compared to the regular brands available in the markets.
“These brands are easily available with wholesalers, retailers and hawkers with labels such as green apple, fresh mint and paan flavour in glossy packets where the mandatory pictorial warnings are missing. They are designed in such a way that the smokers are tempted to buy such cigarettes,” it added.
Indeed, cigarette sellers prefer to stock these brands as their margin on such illicit cigarettes tend to be as high as 100 per cent compared to around 15 per cent in case of the legal cigarettes. The packaging indicates that they have been manufactured in Korea, Indonesia and Japan, but many don’t even mention the country of origin.
As per the Tobacco Institute of India (TII), which represents major companies, farmers, manufacturers and ancillaries of registered cigarette industries in the country, India is the fifth largest illicit tobacco market in the world. Tobacco products are less risky to smuggle than drugs due to lower penalties. “The illicit tobacco products result in a revenue loss of Rs7,000 crore to the exchequer and blames higher taxes for their increased smuggling,” it said.
The escalating and unprecedented excise duty burden on legal cigarettes has almost doubled in the last four years as a consequence of successive increases in Union Budgets since 2012-13. In addition, cigarettes continue to bear the brunt of very high rates of VAT and other State-level taxes. However, TII Director Syed Mahmood Ahmad said, “TII has consistently recommended the policy initiatives that the Government ought to adopt in order to address the issue. The combined effect of Government’s high and discriminatory Central and State-level taxation on cigarettes has impacted the legal cigarette industry, sub-optimised Government’s revenue collection and provided a huge fillip to the illegal cigarette trade in the country.”
The institute’s primary aim is to spread awareness among consumers about not buying or using counterfeit and smuggled goods which have not only a potential health and safety hazard, but also cause a huge drain on Government’s revenues. “In addition, extreme regulations such as graphic health warnings provide further encouragement to the illegal cigarette trade in India, as illegal cigarettes do not comply with tobacco control regulation of the Government,” Ahmad added.
FINE PRINT
India is fifth largest illegal cigarette market in the world Delhi has also become a big smuggled contraband cigarette market with over 60 million illegal cigarette sticks are sold here every month Most popular brands of illegal cigarettes are No10, Ok10, Eleven10, Clock10, India10, Porai, Ruly River, Shooter, Black etcwhich have emerged as big players with a large consumer base Illegal cigarette trading causes the Delhi Govt a loss of over Rs 200 crore annually to the exchequer Illegal cigarettes cause Govt’s revenue losses worth over Rs 9,000 crore, says FICCI CascadeContraband packets do not come with Indian pictorial health warning which is mandatoryOver 1.15 cr cigarette sticks were seized by the customs dept in 2013-14 and the number shot up to a whopping 11.83 crin 2014-15, says Govt data
