NEW DELHI: The government has extended the deadline for introduction of a new registration and monthly return filing procedure for manufacturers of pan masala, gutkha, and similar tobacco products by 45 days until May 15.
Initially, the Central Board of Indirect Taxes and Customs (CBIC) had planned to implement this procedure from April 1, 2024. The initiative to revamp registration, record-keeping, and monthly filing processes for pan masala and tobacco product manufacturers was undertaken to enhance GST compliance within this sector.
Recent Finance Bill 2024 introduced an amendment to the GST law requiring manufacturers of these products to face penalties of up to `1 lakh if they do not register their packing machinery with the GST authorities starting from April 1. This provision for penalties starting from April 1 has not been officially notified yet.
The special procedure for registration and monthly return filing was meant to cover various tobacco products like pan-masala, unmanufactured tobacco, ‘Hookah’ or ‘gudaku’ tobacco, smoking mixtures, chewing tobacco, and more. The CBIC extended the implementation date of this procedure by 45 days through a notification, now effective till May 15.
Manufacturers of tobacco products were mandated to submit details of their packing machines in Form GST SRM-I within 30 days of the notification, starting from April 1, 2024. Additionally, they were required to file a special statement, GST SRM-II, by the 10th of the following month.
In February last year, the GST Council, led by Union Finance Minister Nirmala Sitharaman had endorsed a report by a state finance ministers’ panel aimed at curbing tax evasion in pan masala and gutkha sectors. The Group of Ministers (GoM) proposed transitioning from an ad valorem to a specific rate-based levy for compensation cess on pan masala and chewing tobacco to enhance revenue collection at the initial stage.