In an effort to combat tax evasion in the pan masala and tobacco sectors, the GST portal has introduced new forms and procedures for manufacturers to register their machinery and report monthly inputs and outputs. This initiative follows recommendations from the GST Council and aims to enhance compliance and reduce illicit trade.
To tackle evasion, the GST portal has developed two forms for manufacturers of pan masala and tobacco products:
These forms are part of a notification issued in January, based on GST Council recommendations. Initially set to be implemented on April 1, the system’s launch was deferred to May 15.
Manufacturers of specified goods, including pan masala, gutka, and various tobacco products, are now required to:
The GST portal has already made Form GST SRM-I available for machine registration, with Form GST SRM-II set to be available soon.
The Finance Act 2024 has amended the GST law to include penalties for manufacturers who fail to register their packing machinery. Offenders may face fines of up to ₹1 lakh, although the specific penalty provisions have not yet been notified.
The new procedure applies to manufacturers of a range of tobacco-related products, including:
The notification clarifies that “brand name” encompasses any trade name, symbol, monogram, label, signature, or invented word associated with the specified goods, regardless of whether it is registered.
The new procedures stem from suggestions by a Group of Ministers (GoM) who highlighted the prevalence of tax evasion in the tobacco sector globally. To curb this issue, they proposed:
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