Legal cigarettes account for just 10% of overall tobacco consumed in India. The balance 90% of consumption is represented by traditional products like chewing tobacco, bidis, khaini etc. and illegal cigarettes.

This is unlike the rest of the world where tobacco is synonymous with cigarettes, representing 90% of tobacco consumption.

As per data available up to 2016-17, cigarette taxes on a per kg basis of tobacco consumption are 55 times higher than the other tobacco products consumed in India.

Incidence of taxes on cigarettes after accounting for the GST Cess increase has trebled between 2012-13 and 2017-18.

India is the world’s 2^nd largest producer and a major exporter of tobacco. With an estimated annual production of 800 million kgs., tobacco is an extremely important commercial crop in the country, providing livelihood to 45.7 million people.

Tobacco products generate significant tax revenues amounting to around Rs.40,000 crores annually.

Illegal Cigarette trade accounts for as much as 1/4^th of the Cigarette Industry in India, causing an annual revenue loss of Rs. 13,000 crores.

Extremely high and constantly increasing tax rates on Cigarettes provide a profitable opportunity for tax evasion thereby encouraging growth in illegal trade.