Robust policy and effective implementation needed to curtail menace of illicit trade

Sep 26, 2018

Products which cause maximum revenue loss to the exchequer:

tobacco products - 9139 crore, mobile phones - 6705 crore, alcoholic beverages - 6309 crore

 

BHOPAL, 26 September 2018: FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) today organized a seminar on �Combating Counterfeiting and Smuggling - An Imperative to Accelerate Economic Development�. The seminar discussed the importance of increased awareness on the hazards of counterfeiting and smuggling, and the need for effective enforcement to enhance India�s economic development.

 

Justice (retired) N. K. Jain, Judge of MP High Court and Chairman, Madhya Pradesh State Consumer Redressal Commission encouraged FICCI CASCADE's commitment and drive to curb smuggling and illicit trade in the country, however he mentioned that much more is needed to be done to change the general mind-set with respect to the use of smuggled and illicit goods. Smuggling and counterfeiting goods not only hamper the economic growth of the country but also adversely affect the social fabric and the well-being of its people. He further added on the need for framing robust policies and effective implementation to curtail this menace.

 

Ms Anuradha Sharma, Additional Director General, Madhya Pradesh Police stated that counterfeiting and smuggling is a huge area of concern as it highly impacts the health and safety of the common people along with revenue losses to industry and tax losses to the governments. Such is the enormity of the issue that it requires stern deterrence and joint action between all stakeholders. 

 

Mr. Vijay Agarwal, Vice President,  Federation of Madhya Pradesh Chambers of Commerce and Industry (FMPCCI) & CEO, Narmada Transmission Pvt. Ltd. said that it is imperative to understand the need for safeguarding the rights of legitimate industry in developing competitiveness in various sectors of the economy. 

 

According to the FICCI Cascade report, smuggling in India takes place in various forms viz. misdeclaration, undervaluation, misuse of end use and other means. The report states that the seizure value for misdeclaration of goods stood at Rs. 1,187 crore in 2016, while that of undervaluation of goods stood at Rs. 254 crore. The seizure value from misuse of end use was at Rs. 770 crore and the seizures from other means was at Rs. 2,780 crore, seeing a rise of 191 per cent from Rs. 953 crore in 2015. This suggests evolution of means of smuggling in India with the need of effective government policies to deal with this issue.

 

As per recent reports, a number of seizures of highly smuggled goods such as gold, cigarettes etc. have been carried out in the past few months in the state of Madhya Pradesh. It was indicated that cigarettes worth more than Rs. 100 crores have been seized by the Central GST department at Pandhurna town in Madhya Pradesh. The manufacturer was selling export stocks to the domestic market to avoid heavy taxes on cigarettes levied under the GST. The customs, police department and the state enforcement agencies, in the last couple of months, have taken actions in against those dealing in smuggled products.

 

As per FICCI CASCADE report released in 2015, the total loss to the government on account of illicit markets in just seven manufacturing sectors is Rs 39,239 crores. Amongst the various sectors, the maximum revenue loss to the exchequer is attributed to tobacco products, estimating a revenue loss of Rs. 9139 crores, followed by mobile phones at Rs 6705 crores and alcoholic beverages at Rs 6309 crores.

 

Mr. P. C. Jha, Advisor, FICCI CASCADE and Former Chairman, Central Board of Excise and Customs, stated "During the last twenty years, the volume of the counterfeiting activity globally has increased 100 times and the size of trade in counterfeited goods is 10% of the legal international trade (around 2% of the world�s overall economic output). The problem of illicit trade is much more serious than it is commonly perceived."

 

Mr. Deep Chand, Advisor, FICCI CASCADE and Former Special Commissioner of Police, New Delhi, emphasized on the need for consumers being continuously made aware of the detrimental impact of illicit products. Consumer awareness campaigns that explain how to differentiate a spurious product from a genuine product, to demanding a copy of the bill from the seller, along with the harmful consequences of buying illegal products vis a vis a genuine one, needs to be explicitly conveyed.

 

Other key speakers included Mr. Ranjit Kumar, Joint Commissioner, Customs; Mr. D. Sreenivasa Varma, IGP, CID (Admin), Madhya Pradesh Police; Mr. Animesh Jain, Director, Arihant Detergent Pvt Ltd; Dr. Anamika Gulati, HOD, Quality Department, Dawat Foods Ltd.; Mr. Vijay Ramani, Chairman, Ramani Ice-cream Co. Ltd.; Mr. Aziz Ahmed Siddiqui, Lawyer, Bhopal and Mr. Harendra Singh, Registrar, MP State Consumer Disputes Redressal Commission.

 

Several steps are being taken by FICCI CASCADE and the government to create large-scale awareness among the most impacted segment of this menace: the consumer. The event was attended by more than 100 industry leaders, representative from consumer forums, government officials and stakeholders in this segment.