Pan masala makers to come under new penalty regime

New Delhi: Makers of pan masala will face a new penalty regime, the Central Board of Indirect Taxes and Customs (CBIC) said, moving against an industry that is known for tax evasion.

The CBIC set 1 October 2024 as the date for implementing the penalty regime for the pan masala industry for any violation in registering their machinery.

A penalty of Rs. 1 lakh per machine has been imposed to deter tax evasion. The authorities want to keep a close check on the actual production capacity of the unit and the quantity reported in the tax returns so that there is no underreporting of the quantity of products sent to the market.

As per the amendment to the law introduced earlier this year, a producer of items like pan masala and gutka who are subject to a special regime of registration of machines will be liable to a penalty of Rs. 1 lakh for every machine used that is not registered. 

Source : https://www.livemint.com/politics/policy/pan-masala-makers-to-come-under-new-penalty-regime-new-provisions-for-using-gst-credits-effective-from-april-2025-11723029995995.html