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Gutkha price hike angers dealers, pleases public

Sandesh Prabhudesai in Panaji

The massive hike on sales tax on gutkha (flavoured chewing tobacco) in Goa has sparked a controversy. The Congress government is caught between the contradictory demands of the gutkha dealers and the anti-tobacco citizens' groups.

The public at large, however, appears very happy with Chief Minister Pratapsinh Rane's step to hike the sales tax on gutkha from eight per cent to 100 per cent.

In the tiny state, the annual gutkha turnover is considered to be around Rs 96 million. The sales tax department was annually earning around Rs 7.7 million from gutkha sales alone.

But the hike would not reduce consumption rate, feels Shripad Pai, a gutkha dealer. On the contrary, he feels it would lead to illegal sales of low quality gutkha smuggled in from the neighbouring states.

The gutkha dealers suspect the hand of the tobacco and cigarette lobby behind the price hike, since now a small gutkha pouch will cost Rs 3, more than a cigarette. Earlier, it cost as little as Re 1. The dealers also charge the state for knowingly encouraging corruption.

The dealers appreciate the Maharashtra government's decision to reduce sales tax on gutkha from 20 to 12 per cent, while it is 13 per cent in Karnataka. The dealers also say they are prepared to pay sales tax up to 20 per cent, more than twice the present rate.

"I appeal to the chief minister not to succumb to such pressures as the present step will tremendously reduce gutkha consumption among children and others," states Dr Sharad Vaidya, chairman of the National Organisation for Tobacco Eradication.

He also feels the government should implement the Maharashtra government's proposal to allow gutkha packet in sizes of not less than 500 grams. He totally disagrees with the argument that it would lead to black marketing.

Meanwhile, the state assembly has also passed a bill banning chewing or smoking all tobacco products in public places and its sale near schools, etc. But the bill needs the President's assent, and has been pending for the last nine months.