National calamity Contingent Duty increased in Budget-Concerns of Tobacco institute

The Budget 2020-21 that was presented by the Finance Minister Nirmala Sitaraman increased the National Calamity Contingent Duty.  The imposed duty is expected to witness price rise of 7% in the sales of cigarettes.

The NCCD is tax imposed on pan masala, cigarettes, cellular phones and other tobacco products. It was introduced under Finance Act, 2001

The Tobacco Institute of India believes that increasing the NCCD will incentivize illegal cigarette trading in the country. Currently, the illegal cigarettes account to one-fourth of the Indian Cigarette market.

The Fund was proposed by the 11th Finance Commission. It has a core corpus of Rs 500 crores. The fund is replenished through National Calamity Contingent Duty. Since April 2010, the NCCF has been merged with the National Disaster Response Fund.

The assistance from the NCCF is only for immediate relief and cannot be used for restoration of damaged infrastructure.