Govt suffers tax loss of Rs 58,521 cr due to illicit trade in 5 key industries: FICCI
PATNA: FICCI CASCADE has recently released a report examining illicit market in 5 Key Indian industries, including mobile phones, FMCG-household and personal goods, FMCG-packaged foods, tobacco products, and alcoholic beverages. According to the report, the size of illicit market in the above-mentioned industries was Rs. 2,60,094 crore for the year 2019-20, with the FMCG industry — household and personal goods, and packaged foods — together accounting for 3/4th of the total illicit value of goods in five key industries.
The report further estimates that unlawful trade in the five above-mentioned industries results in a total estimated legitimate employment loss of 15.96 lakh. The estimated tax loss to the government due to illicit goods in these industries is Rs. 58,521 crore, with two highly regulated and taxed industries, tobacco products, and alcoholic beverages, accounting for nearly 49 per cent of the overall tax loss.
Samir Kumar Mahaseth, Industry Minister, Government of Bihar on Tuesday said, "The problem of counterfeiting and smuggling is complex in nature. With no legal regulation and very little recourse, consumers are at risk from unsafe and ineffective products." It is important that consumers understand the multi-faceted complexities of this problem. Youth are the consumers of tomorrow, who can encourage and bring about the required change through their choices and behaviours, he added.
Addressing the FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) programme on 'Preventive Strategies to Combat Counterfeiting and Smuggling' Mr Mahaseth emphasized that educating and generating awareness about the ill effects of counterfeiting and smuggling is the need of hour to combat this global scourge. He further suggested FICCI CASCADE to organize such youth awareness program in Bihar more frequently to motivate the youth of the state in achieving our objective in making India free from illicit trade. "Smuggling and Counterfeiting are more dangerous than life threatening diseases like Cancer and COVID", he added.
Dipak Kumar Singh, Additional Chief Secretary, Department of Education, Government of Bihar said, "Uninhibited growth of counterfeiting and smuggling not only impact the economy of our country but also poses severe threat to public health and safety." Smuggling and counterfeiting leads to tax evasion which further slows down the pace of development of the country. He also emphasized the need to take a bill while making any purchase, to act as proof of purchase.
P C Jha, Advisor, FICCI CASCADE and Former Chairman, Central Board of Indirect Taxes & Customs said, "Illicit trade is of grave concern, it undermines the nation's economy, damages brand integrity, and most importantly affects health and safety of the citizens which needs to be addressed on an urgent basis. During the last twenty years, the volume of counterfeiting activity globally has increased 100 times and the size of trade is 10 per cent of the legal international trade (around 2 per cent of the world's overall economic output). The problem of illicit trade is much more serious than it is commonly perceived."
Rajiva Ranjan Verma, Former Director General, RPF, NCRB, Civil Defense, Home Guard & Fire Services and BPR&D said, "Raising awareness is an important aspect of combating illicit trade in terms of smuggling and counterfeiting which needs to be pursued vigorously." The role of youth is paramount in battling the menace of smuggling and counterfeiting, he noted.
