The Times of India
April 21 2007
New Delhi
KOZHIKODE: Representatives of the Indian Tobacco Company and traders in Kerala, who are at loggerheads over who should pay taxes on cigarettes, will meet in Kochi on April 22 in a final bid to resolve the crisis, a leading traders body said on Thursday.
"We are meeting company representatives as a last effort and hope ITC will meet our one-point demand by agreeing to pay the 12.5 per cent Value Added Tax before fixing the maximum retail price, thereby sparing retailers from incurring the loss', Vyapari Vyavasayi Ekopana Samithi President, T Naseeruddin said. Noting that retailers, who on an average sold cigarettes worth Rs 10 lakh annually, would have to pay Rs 50,000 as tax if the company refused to pay VAT before fixing the MRP, he said that the government, which has recently included cigarettes also under VAT, had left the option to the company.
If the talks failed, the Samithi would then demand action against a section of the distributors, who were now `illegally engaged' in distributing cigarettes directly to the retailers bypassing wholesale traders, he said. "Anyone involved in the trade will have to necessarily possess a VAT registration and salesman permit to sell the product. We will seek stern action against the offenders in case our talks fail and if sales still continue', he said.
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