Pan Masala, Gutkha (Photo: Wikipedia)
The government has extended the deadline for implementation of a special procedure for registration and monthly declaration of manufacturers of pan masala, gutkha and similar tobacco products to May 15.
Earlier in January, the Central Board of Indirect Taxes and Customs (CBIC) had announced the introduction of a new registration and monthly filing procedure with effect from April 1, 2024.
The move to overhaul registration, record keeping and monthly filing of such companies was aimed at improving GST compliance for manufacturers of pan masala and tobacco products.
The GST law was also amended through Finance Bill 2024, to say that 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 machines with the GST authorities with effect from 1 April.
However, this penalty provision has yet to be announced.
The procedure would apply to manufacturers of pan masala, raw tobacco (without lime tube) with or without brand name, ‘Hookah’ or ‘gudaku’ tobacco, smoking mixtures for pipes and cigarettes, chewing tobacco (without lime tube), filter khaini, jarda scented tobacco, snuff and branded or unbranded ‘Gutkha’, etc.
The CBIC, through a notification, has extended the date of implementation of this special procedure by 45 days to May 15.
The manufacturers of such tobacco products were required to electronically furnish details of the packaging machines used for filling and packing packets in Form GST SRM-I within 30 days from the coming into force of the notification i.e. April 1, 2024.
Also, a special GST SRM-II return declaration had to be filed before the 10th of the following month.
Moore Singhi director Rajat Mohan said neither the GST Network has issued any guidance on the new procedure nor released any new filing tools. As a result, the government has decided to postpone the implementation of the new procedure by 45 days until May 15.
“This delay by the GST ecosystem has led to challenges for the industry in implementing the new scheme mid-year. Ideally, any new scheme should be implemented at the start of a new financial year to enable smoother transitions and better compliance Mohan added.
In February last year, the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state colleagues, had approved the report of a panel of state finance ministers on curbing tax evasion in pan masala and gutkha companies.
The Indian government had recommended changing the mechanism for levying compensation tax on pan masala and chewing tobacco from ad valorem to a specific rate-based levy to boost the first phase of revenue collection.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)
First print: April 11, 2024 | 12:48 pm IST