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TOBACCO BOARD ACT, 1975
4 of 1975
19th March, 1975
STATEMENT OF OBJECTS AND REASONS India is the third largest producer of tobacco in the world with an average annual production of 350 million kilograms and sixth among the tobacco exporting countries with an average annual export of about 55 million kilograms, Virginia tobacco is the most important variety grown in the country (to the extent of about 100 to 125 million kilograms annually) and over fifty per cent. of the production is exported, making India the second largest exporter of Virginia tobacco in the world. 2. For effectively regulating the tobacco industry, particularly Virginia tobacco industry and for maintaining and improving exports and thereby augmenting the country's foreign ex- change resources, it is absolutely necessary to take various measures right from the stage of production. The production of tobacco, particularly the Virginia tobacco has to be planned carefully to suit specified needs of the markets by ensuring the requisite standards of quality and the fluctuations in production and prices have to be minimised. It is also necessary that services and facilities for research, marketing, warehousing, publicity and propaganda abroad and market intelligence in competing countries should be extended to this important export oriented industry in an integrated manner. At present there is no single authority in India which can deal with the various aspects of this industry in an integrated and effective manner. There are as many as five different independent organisations looking after or exercising control over the movement, production, research, extension, quality control and export of tobacco. This is not conducive to the integrated approach which is needed for the effective regulation and development of the industry. In order, therefore, to provide the much needed integrated institutional set-up, the question of bringing tobacco industry under the control of the Union and setting up a Tobacco Board has been under consideration of the Government of some time past. A number of Members of Parliament and Members of State Legislatures have been voicing demand for such a Board. The State Governments have been consulted and they also seem to favour the constitution of such a Board. 3. It is, therefore, proposed to provide for the development of the tobacco industry under the control of the Union and for the establishment of a Board to be known as the Tobacco Board. The Board is proposed to be constituted, among others, with Members of Parliament, representatives of the Ministries of .Central Government dealing with Agriculture, Commerce, Finance and Industrial Development, Indian Council of Agricultural Research, growers of tobacco, dealers or exporters of tobacco and tobacco products, manufacturers of tobacco products, and of the representatives of the tobacco growing States. It is proposed to vest the Board with adequate powers to deal with various aspects of the industry. 4. The finances of the Board will consist of the fees collected by it, grants or loans made by the Central Government or by any person and the sums realised by the Board in the discharge of its functions. 5. To ensure that the Board has adequate resources, it is proposed to undertake separately legislation for the imposition, by way of cess of a duty of excise on Virginia tobacco which is produced in India and a duty of customs on all tobacco which is exported and for making over the proceeds, after due appropriation by Parliament by law, to the Board. 6. It is also proposed to take power for the Central Government to prohibit or control the imports and exports of tobacco and tobacco products either generally or in specified classes of cases. 7. The Bill seeks to achieve the above objects. The notes on clauses explain in detail the main provisions thereof. - Gaz. of Ind. 9-12-1974 Pt. II, S. 2. Ext" p. 1155. Amending Act 36 of 1978.- In pursuance of sub-section (1) of section 4 of the Tobacco Board Act, 1975 (4 of 1975), the Tobacco Board was established by the Central Government on the 1st January. 1976. In the course of the functioning of the Tobacco Board, certain practical difficulties have come to light. 2. Subsection (3) of section 4of the Act has specifically designated Guntur in the State of Andhra Pradesh as the place where the head office of the Board is to be located. Guntur is a very important centre from the point of view of production and marketing of Virginia tobacco which is the most important exportable variety grown in the country. However, this place has no direct rail or air link with either New Delhi or the capitals of other tobacco producing States in the country. Since the Tobacco Board is an all India body dealing with all varieties of tobacco, it is considered vital for its efficient functioning that the Central Government should have the power lo locate the head office of the Board at such other place as may be considered necessary in the interests of efficient functioning of the Board. 3. In recognition of the importance of Gujarat as the second largest tobacco producing State in the country after Andhra Pradesh, even though the tobacco produced there is primarily of non- virginia type, it
is proposed to accord a permanent sent on the Board for the representative of the Government of Gujarat as in the case of Andhra Pradesh and Karnataka. 4. Under section 13of the Act, no registered grower or curer can sell or cause to he sold virginia tobacco elsewhere than at an auction platform registered with the Board in accordance With the rules made under the Act. This provision as well as the functions of the Board specified in section 8do not specifically empower the Board to set up auction platforms of its own or to function as an auctioneer at such platforms. For securing fair and remunerative prices to the growers and for providing efficient auction facilities it is considered necessary that the Board should also have the power to set up its own platforms. It is considered further that the Board should also have the power to function as an auctioneer not only at such platforms but also at platforms which may be set up by others and registered with the Board. 5. There is at present no specified provision in the Tobacco Board Act, 1975 for levy and collection of suitable fee from the sellers and buyers of virginia tobacco for the use of the auction platforms that may be established by the Tobacco Board and for the services to be provided in connection with the auctions to be held at these platforms. It is considered necessary to make such provision for meeting the expenses to be incurred by the Board in conducting auctions and in operating these platforms. 6. It is also proposed to make certain consequential amendments to sections
2 and 3 of the Tobacco Cess Act, 1975 (26 of 1975) so as to bring within the scope of the definition of "auction platform" - an auction platform establish ed by the Board. 7. The Bill seeks to give effect to the above objects. - Gaz. of Ind.. 4-5-1978, Pt. II, S. 2, Ext.. p. 460.
An Act to provide for the development under the control of the Union of the tobacco industry. BE it enacted by Parliament in the Twenty-sixth Year of the Republic of India as follows:-
SECTION 01: SHORT TITLE, EXTENT AND COMMENCEMENT
(1) This Act may be called THE TOBACCO BOARD ACT, 1975.
(2) It extends to the whole of India.
(3) It shall come into force on such date2as the Central Government may, by notification in the Official Gazette, appoint: Provided that different dates may be appointed for different provisions of this Act and for different States or different parts thereof.
SECTION 02: DECLARATION AS TO EXPEDIENCY OF CONTROL BY THE UNION
It is hereby declared that it is expedient in the public interest that the Union should take under its control the tobacco industry.
SECTION 03: DEFINITIONS
In this Act unless the context otherwise requires,-
(a) "Board" means the Tobacco Board established under section 4-;
(b) "Chairman" means Chairman of the Board;
(c) "curing" shall have the meaning assigned to it in the Central Excises and Salt Act. 1944-and all its grammatical variations and cognate expressions shall be construed accordingly,
(d) "dealer" means a dealer in tobacco;
(e) "Executive Director" means the Executive Director appointed under section 6-:
(f) "export" and "import" mean, respectively, taking out of or bringing into, India, by hind. sea or air;
(g) "member" means a member of the Board and includes the Chairman;
(h) "prescribed" means prescribed by rules made under this Act-
(i) "registered" means, except in the expression "registered grower", registered under chapter III of this Act and the rules made thereunder;
(j) "registered grower" means a person who has obtained a certificate of registration under section 10-for growing Virginia tobacco-
SECTION 04: ESTABLISHMENT AND CONSTITUTION OF THE BOARD
(1) With effect from such date as the Central Government may, by notification in the Official Gazette appoint in this behalf, shall be established for the purposes of this Act, a Boards to be called the Tobacco Board.
(2) The Board shall be a body corporate by the name aforesaid, having perpetual succession and a common seal, with power to acquire, hold and dispose of property, both movable and immovable, and to contract, and shall by the said name sue and be sued.
3[(3) The head office of the Board shall be at Guntur in the State of Andhra Pradesh and the Board may, with the previous approval of the Central Government, establish offices or agencies at other places in or outside India.]
(4) The Board shall consist of the following members namely:-
(a) a Chairman to be appointed by the Central Government;
(b) three members of Parliament, of whom two shall be elected by the House of the People and one by the Council of States;
(c)4[eight] members to be appointed by the Central Government to represent respectively;-
(i) the Ministry of the Central Government dealing with Agriculture;
(ii) the Ministry of the Central Government dealing with Commerce;
(iii) the Ministry of the Central Government dealing with Finance;
(iv) the Ministry of the Central Government dealing with Industrial Development;
(v) the Indian Council of Agricultural Research ;
(vi).the Government of Andhra Pradesh;5[*].
7[(via) the Government of Gujarat; and]
(vii) the Government of Karnataka;
(d) two members to be appointed by the Central Government, by rotation in the alphabetical order, to represent the Governments of tobacco-growing States6[other than the States of Andhra Pradesh, Gujarat and Karnataka];
(e) not more than [ten members] to be appointed by the Central Government from amongst growers of tobacco, dealers and exporters (including packers) of tobacco and tobacco products, manufacturers of tobacco products and from amongst persons who in the opinion of the Central Government, are experts in tobacco marketing or agricultural economics.9[Provided that the number of members appointed under this clause from amongst the growers of tobacco shall not exceed six.]
10[
(f) the Agricultural Marketing Adviser to the Government of India, Department of Rural Development, ex officio ,
(g) the Executive Director, ex officio.
11[
(4A) It is hereby declared that the office of member of the Board shall not disqualify its holder for being chosen as, or for being, a member of either House of Parliament.]
(5) The Board shall elect, from amongst its members, a Vice-Chairman who shall exercise such of the powers and perform such of the functions of the Chairman as may be prescribed or as may be delegated to him by the Chairman.
(6) The term of office of the members and the manner of filling vacancies among, and the procedure to be followed in the discharge of their functions by, the members shall be such as may be prescribed.
(7)12The Executive Director and any such officer of the Central Government (not being a member of the Board) as is deputed by the Central Government in this behalf, shall have the right to attend the meetings of the Board and take part in the proceedings thereof, but shall riot have the right to vote.
(8) The Board may associate with itself, in such manner and for such purposes as may be prescribed, any person whose assistance or advice it may desire in complying with any of the provisions of this Act and a person so associated shall have the right to take part in the discussions of the Board relevant to the purposes for which he has been associated, but shall not have the right to vote.
(9) No act or proceeding of the Board or any committee appointed by it under section 7-shall be invalidated merely by reason of-
(a) any vacancy in, or any defect in the constitution of the Board or such committee; or
(b) any defect in the appointment of a person acting as a member of the Board or of such committee; or
(c) any irregularity in the procedure of the Board or such committee not affecting the merits of the case.
SECTION 05: SALARY AND ALLOWANCES AND OTHER CONDITIONS OF SERVICE OF CHAIRMAN
The Chairman shall be entitled to such salary and allowances and such conditions of service in respect of leave, pension, provident fund and other matters as may, from time to time, be fixed by the Central Government.
SECTION 06: OFFICERS OF THE BOARD AND OTHER STAFF
(1) The Central Government shall appoint an Executive Director to exercise such powers and perform such duties under tire Chairman as may be prescribed or as may be delegated to him by the Chairman.
(2) The Central Government shall appoint a Secretary to the Board to exercise such powers and perform such duties under the Chairman as may be prescribed or as may be delegated to him by the Chairman.
(3) The Executive Director and Secretary shall be entitled to such salaries and allowances and such conditions of service in respect of leave, pension, provident fund .and other matters as may from time to time be fixed by the Central Government.
(4) Subject to such control, restrictions and conditions (including conditions as ta appointment of the officers and other employees of the Tobacco Export Promotion Council, in the event of the said Council being wound up) as may be prescribed, the Board may appoint such other officers and employees as may be necessary for the efficient performance of its functions.
(5) The Chairman, the Executive Director, the Secretary and other officers and employees of the Board shall not undertake any work unconnected with their duties under this Act except with the permission of the Central Government.
SECTION 07: COMMITTEES OF THE BOARD
(1) The Board may appoint such committees as may be necessary for the efficient discharge of its duties and performance of its functions under this Act.
(2) The Board shall have the power to co-apt as members of any committee appointed under subsection
(1) such number of persons who are not members of the Board as it may think fit and the persons so co-opted shall have the right to attend the meetings of the committee and take part in the proceedings of the committee but shall not have the right to vote.
SECTION 08: FUNCTIONS OF THE BOARD
(1) It shall be the duty of the Board to promote, by such measures as it thinks fit, the development under the control of the Central Government of the tobacco industry.
(2) Without prejudice to the generality of the provisions of sub-section (1), the measures referred to therein may provide for
14[(a) regulating the production and curing of Virginia tobacco having regard to the following factors, namely:-
(i) the demand for Virginia tobacco in India and abroad ;
(ii)the suitability of land for growing Virginia tobacco ;
(iii)the differences in soil characteristics and agro-climatic factors in different regions of the country where Virginia tobacco is grown and the effect thereof on the quality and quantity of Virginia tobacco produced in those regions ;
(iv) the marketability of different types of Virginia tobacco ;
(v) the need for rotation of crops ; and
(vi) the nature of the holdings of the growers of Virginia tobacco whether owned or leased ;]
(b). keeping a constant watch on the Virginia tobacco market, both in India and abroad, and ensuring that the growers get a fair and remunerative price for the same and that there are no wide fluctuations in the prices of the commodity,
(c) maintenance and improvement of existing markets, and development of new markets outside India for Indian Virginia tobacco and its products and devising of marketing strategy in consonance with demand for the commodity outside India, including group marketing under limited brand names;
13[(cc) establishment by the Board of auction platforms with the previous approval of the Central Government, for the sale of Virginia tobacco by registered growers or curers, and functioning of the Board as an auctioneer as auction platforms established by or registered with it subject to such conditions as may be specified by the Central Government;]
(d) recommending to Central Government the minimum prices which may be fixed for purposes of export of Virginia tobacco with a view to avoiding unhealthy competition amongst the exporters;
(e) regulating in other respects Virginia tobacco marketing in India and export of Virginia tobacco having due regard to the interests of growers, manufacturers and dealers and the nation:
(f) propagating information useful to the growers, dealers and exporters (including packers) of Virginia tobacco and manufacturers of Virginia tobacco products and others concerned with Virginia tobacco and products thereof;
(g) purchasing Virginia tobacco from growers when the same is considered necessary or expedient for protecting the interests of the growers and disposal of the same in India or abroad as and when considered appropriate;
(h) promoting the grading of tobacco at the level of growers;
(i) sponsoring, assisting, coordinating or encouraging scientific, technological and economic research for the promotion of tobacco industry;
(j) such other matters as may be prescribed.
(3) Without prejudice to the generality of the provisions of sub -section (1) and subject to priority being given to matters specified in sub-section (2) the measures referred to in sub-sec. (1) may also provide in relation to tobacco, other than Virginia tobacco, for all or any of the matters specified in clauses (c) to (g) of sub-section (2) and for this purpose any reference in those clauses to Virginia tobacco shall be construed as including a reference to tobacco other than Virginia tobacco.
(4) The Board shall perform its functions under this section in accordance with and subject to such rules as may be made by the Central Government and such rules may in particular make provisions for ensuring that the Board functions in close liaison with Union agencies, institutions and authorities concerned with the tobacco industry (including growing of tobacco) and avoids duplication of effort.
SECTION 09: DISSOLUTION OF THE BOARD
(1) The Central Government may, by notification in the Official Gazette and for reasons to be specified therein, direct that the Board shall be dissolved from such date and for such period as may be specified in the notification: Provided that before issuing any such notification, the Central Government shall give a reasonable opportunity to the Board to make representations against the pro- posed dissolution and shall consider the representations, if any, of the Board.
(2) When the Board is dissolved under the provisions of sub-section (1)-
(a) all members notwithstanding that their term of office has not expired, shall, from the date of dissolution, vacate their offices as such members-
(b) all powers and duties of the Board shall, during the period of dissolution, be exercised and performed by such person or persons as the Central Government may appoint in this behalf; .
(c) all funds and other properties vested in the Board shall, during the period of dissolution, vest in the Central Government; and
(d) as soon as the period of dissolution expires, the Board shall be reconstituted in accordance with the provisions of this Act.
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