From April 1, manufacturers of pan masala, gutka and similar tobacco products will have to pay a fine of up to Rs 1 lakh if they fail to register their packaging machinery with the GST authorities.
The move is aimed at curbing revenue leakage in the tobacco manufacturing industry.
Also read: GST losses major concern, CBI may probe officials for tax evasion: Sources
The Finance Bill, 2024 amended the Central Goods and Services Tax Act whereby a fine of Rs 1 lakh will be imposed on each unregistered machine.
Additionally, such non-compliant machinery will be subject to the risk of seizure and confiscation under certain circumstances.
Following the recommendations of the GST Council, the tax authority last year notified tobacco manufacturers of special procedures for registering machines.
Details of existing packaging machines, newly installed machines and packaging capacity of these machines must be provided in the GST SRM-I form. However, he was not punished for this.
Revenue Minister Sanjay Malhotra said that the GST Council in an earlier meeting decided that for pan masala, gutka and similar products, their machines should be registered so that we Their production capacity can be monitored.
“But if they fail to register, there will be no penalty. So, the council decided that there should be some penalty. That’s why in the Finance Bill, you will find that failure to register the machines will attract a fine of up to one lakh rupees.” Mal Khotela told PTI.
In February last year, the GST Council, chaired by the Union Finance Minister and composed of counterparts from various states, approved the report of a group of state finance ministers on plugging tax evasion by pan masala and gutkha businesses.
The GoM (Group of Ministers) has recommended changing the mechanism for levying compensation cess on pan masala and chewing tobacco from ad valorem to specific rate-based levy to improve revenue collection in the first phase.
Following this, the government made amendments to the Finance Bill 2023, according to which GST compensation tax will be levied on pan masala and other forms of tobacco at the highest rate on the retail price.
(This story has not been edited by News18 staff and is published from associated news agency – PTI)
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