Substandard tobacco products under close scrutiny
Law enforcement authorities are on high alert to detect substandard
tobacco products and nab tobacco tax evaders to regulate the Beedi
industry, following the new Budget proposals, the sources said.
In his Budget speech on Thursday Finance Minister Ravi Karunanayake
said that the high taxes on cigarettes had changed the consumption
pattern towards low priced products which are manufactured in a manner
harmful to health.
The Excise and Customs Departments have intensified detections of the
substandard Beedi industry as a domestic enterprise, the sources said.
The Customs Preventive Division last December seized a 40-foot
container from India where the consignment had been declared as Tendu
Leaves. Tendu leaf is used to wrap the Beedi instead of regular
cigarette paper. The container also carried a large stock of tobacco
dust used to manufacture beedi as its base which has a higher tax.
A kilogram of Tendu leaves is taxed at Rs.25 whereas a kilogram of
Tobacco leaves is taxed at Rs.250.
Tendu leaves are imported from India since it does not grow in Sri
The import of tobacco leaves declared as Tendu leaves could
circumvent the massive tax which results in the loss of millions of
rupees in government revenue.
A recent investigation by the Ceylon Tobacco Company, the sole
cigarette manufacturer in the country had found that substandard
products are being used to produce Beedi as a cottage industry.
Finance Minister Karunanayake said that steps would be taken to
regulate the Beedi industry.