The Centre is planning to raise the legal age for consumption of cigarettes and other tobacco products.
If the plan is implemented, a large number of cigarette manufacturers are likely to face a tough situation in their business.
The Centre has drafted the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Amendment Act, 2020 to raise the age for allowing sale of cigarettes and tobacco products from 18 years to 21.
The provision is a part of the new bill, which is being piloted by the Union health ministry.
The new bill seeks to further amend the Cigarettes and other Tobacco Products Act, 2003.
The bill is likely to hit cigarette manufacturers as they will face “potential headwinds as it will become more difficult to add consumers and will affect volumes by virtue of sale of only sealed packs being allowed,” a media report quoted Abneesh Roy, research analyst at Edelweiss as saying.
However, Roy expects that “weak enforcement of rules to limit damage as it will be difficult to monitor and implement this new law”.
He also said the crackdown on loose cigarettes will benefit large manufacturers.
The proposals seeking amendments in the bill include:
“No person shall sell, offer for sale, or permit sale of, cigarette or any other tobacco product – (a) to or by any person who is under twenty-one years of age, and in an area within a radius of one hundred meters of any educational institution.”
As per a new provision: “No person shall, directly or indirectly, produce, supply or distribute cigarettes or any other tobacco products unless every package of cigarettes or any other tobacco products produced, supplied or distributed by him is having minimum quantity as may be prescribed.”
Contravention of this Section 7 will lead to imprisonment of two years or fine going up to Rs 1 lakh and second conviction leading to prison for 5 years or fine going up to Rs 5 lakh.
The new bill also has a provision for coming down on manufacture and sale of illicit cigarettes and tobacco products.
The sale of illicit tobacco products will lead to the punishment of imprisonment of 1 year and a fine of Rs 50,000 and a second conviction of imprisonment of 2 years and Rs 1 lakh.
The fine on the manufacture of illicit cigarettes is imprisonment of 2 years and fine of Rs 1 lakh.
The penalty for smoking cigarettes at restricted areas is being increased from Rs 200 to Rs 2,000.