Illegal sale of Imported Cigarettes

In news

An inspection was conducted on 23rd December, 2020 by Excise and Taxation department in Amritsar on two prominent cigarette distributors that disclosed that illegal cigarettes sale was too high in Punjab making it a hub of banned imported cigarettes.

About

• Punjab is seen as emerging hub of illegal sale of imported cigarettes.
• These cigarettes are mainly sold in Jammu & Kashmir and Himachal Pradesh.
• These cigarettes are sold at very cheap price, attractive packing and does not carry health warnings whereas Indian brand cigarettes carry health warnings in pictorial and text format, both to discourage smokers.
• These are mostly smuggled from China, Malaysia, South Korea and Indonesia to evade taxes.
• These illegal cigarettes are mostly routed from Delhi to Amritsar, Chandigarh, Ludhiana and Jalandhar.

City/ Region	Legal sale (in %)	Illegal sale (in %)
Chandigarh	80-85	15-20
Panchkula	80-85	15-20
Shimla	90	10
Manali	80	20
Kashmir	92-93	7-8

• Punjab has annual legal market of 120 million cigarettes.
• Chandigarh and Panchkula cities have an annual legal market of 20 million and 10 million cigarettes respectively.
• Kashmir has an annual legal market of 300 million cigarettes.
• Shimla has annual legal market of 10 million cigarettes whereas Manali has annual legal market of 5 million cigarettes.
• The retailers have to significantly pay a low price to international brands as compared to Indian Brands.
• They are available in the market at one fifth the price of the legal product.

Cigarettes and Other Tobacco Products Act (COTPA)

The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 or COTPA, 2003 is an Act of Parliament of India enacted in 2003 to prohibit advertisement of, and to provide for the regulation of trade and commerce in, and production, supply and distribution of cigarettes and other tobacco products in India.

The provisions of the act are given briefly:

1. The Act prohibits smoking of tobacco in public places.
2. Advertisement of tobacco products including cigarettes is prohibited.
3. Tobacco products cannot be sold to person below the age of 18 years, and in places within 100 yards radius from the outer boundary of an institution of education.
4. Tobacco products must be sold, supplied or distributed in a package which shall contain an appropriate pictorial warning, its nicotine and tar contents.
5. The Act also gives power to any police officer, not below the rank of a sub-inspector for search and seizure of premises where tobacco products are produced, stored or sold.
6. A person who manufactures tobacco products and fails to adhere to the norm related to warnings on packages on first conviction shall be punished.
7. The Act repealed The Cigarettes (Regulation of Production, Supply and Distribution) Act, 1975.
8. The owner/manager/in-charge of a public place must display a board containing the warning "No Smoking Area - Smoking here is an offence” in appropriate manner at the entrance and inside the premises.