In a pre-budget memorandum to finance minister Yashwant Sinha, Aitma president Anil Kumar Gupta said tobacco manufacturing should be given the status of bidi industry which attracted only five per cent excise duty. Gupta suggested that there should be different duty structure for high cost premium varieties and low cost tobacco as the case with cigarette industry.

Prices of high cost varieties vary between Rs 1,000 to Rs 10,000 per kilogram while that of low cost chewing tobacco was less that Rs 150 per kg, he said. Gupta said the reduction in excise duty on chewing tobacco costing less that Rs 150 per kg would not amount to any substantial loss.