Ajit Pawar cuts down VAT on 'beedis', tobacco

The state government on Friday announced a 7.5% reduction in value-added tax (VAT) on beedis and branded tobacco sachets. Last month, a VAT of 12.5% and 20%, respectively, was levied on beedis and tobacco sachets.

Finance minister Ajit Pawar said the decision to reduce the tax was taken following pleas from beedi workers and elected representatives.

While making the announcement in the assembly, Pawar said after inclusion of beedis and tobacco sachets under the VAT bracket in the budget presented last month, there was an outcry at various levels. Some claimed that the move would hit the daily wages of workers at beedi factories and those with the branded tobacco sachet industry. "Responding to the claims, we have decided to reduce the taxes with immediate effect," he announced.

Pawar also announced the withdrawal of the 5% VAT levied on the purchase price of cotton. Elected representatives had demanded that the scrapping of this tax on the grounds that it would affect the farmers' profit margin.

All announcements are subject to approval from the cabinet.