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Cigarette story: Smuggled, untaxed & readily available |
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Kochi: The product is commonplace, but brand is the key and without paying taxes the returns from smuggling them are manifold. After a brief lull, smugglers have returned to their favourite product, foreign cigarettes, which has a high profit margin. The lure is so strong that even gold smugglers have shifted their loyalties and entered the business, say officials from the directorate of revenue intelligence (DRI).
In 2015, customs sleuths foiled at least 10 attempts a day at Cochin international airport (Cial) alone as passengers arrived with excess quantity of foreign cigarettes over the prescribed limit of one carton. Customs and DRI had together foiled three attempts to smuggle foreign cigarettes worth Rs 10.5 crore through the international container transshipment terminal (ICTT) at Vallarpadam over the past two months.
"There is almost 100% pro fit in cigarette smuggling as customs import duty (nearly 125%) is evaded. When an importer smuggles foreign cigarettes worth Rs 30 lakh, an equal amount is earned as profit. This lucrative margin is luring importers," said a DRI official.
Dubai continues to be the source for cigarette smuggling to India. Officials said that highest number of foreign cigarette hauls were seen in Mumbai ports, due to which consignments are of ten diverted to ICTT, Chennai, Colombo and Krishnapatnam in Andhra.
The official said that there has been a decline in the number of gold smuggling cases over the past few months."The margin in gold smuggling is low as one gets nearly Rs 4 lakh while smuggling a cache worth Rs 30 lakh. Easy liquidity is one big factor driving gold smuggling. In the case of foreign cigarettes, the importer will have to wait for a long period to earn the pro fit. Unlike gold, cigarettes are not detected by scanners used by enforcement agencies," he said.
Enforcement agencies say that cigarette smuggling is as old as gold smuggling, but restrictions imposed on passengers has opened the doors for big smuggling operations.Now smugglers ship them off as a passenger can carry just a carton of 200 sticks. The earlier limit was two.
With the government frequently increasing taxes on cigarettes, the price of imported cigarettes and the local variety are almost the same. People prefer imported ones in such a scenario for their quality. A few months ago, a popular Indian brand cigarette was sold at Rs 10 apiece whereas a foreign one, comparatively a smooth variety , was available at the same price.
"The warning labels of foreign cigarettes do not comply with Indian norms. So smuggled ones are sold at local shops in small quantities.Curbing local sale is a tough task," said the official.
Source : timesofindia.indiatimes.com
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