Substandard tobacco products under close scrutiny

by Kurulu Kariyakarawana

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 Lanka.

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.