In a bid to woo the big industry, the West Bengal government will withdraw the 10 per cent luxury tax on cigarettes before the next budget.
Keen to give a push to industrialisation, the state government is going all out to give sops to the big companies like Indian Tobacco Company who have promised to diversify in the state. The state government had come under severe criticism from ITC and other companies when this tax was introduced in last budget under West Bengal Luxury Act, 1994.
The decision to withdraw the tax is being defended on the grounds that the rise in cigarette prices in West Bengal due to the tax had encouraged largescale smuggling from the neighbouring states, undercutting the revenue of the former. The tax which was supposed to earn Rs 40 crore for the state, has brought in just Rs 5 lakh in actual revenue till date.
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