Government Uncovers ₹104-Crore Tax Evasion by Tobacco Dealers This Fiscal Year

Swift Summary

• Tax Evasion Detected: Authorities have identified 61 cases of tax evasion by entities dealing in gutka,cigarettes,and pan masala. The total evaded tax amounts to ₹104.38 crore as of June 2025.
• Challenges in Estimation: The Department of Revenue noted that illegal trade in tobacco products is a clandestine activity, making accurate estimation of lost revenue arduous.
• government Response:

– Central Goods and Services Tax (CGST) zones and the Directorate General of Goods and Services Tax Intelligence (DGGI) are taking measures to verify compliance among registered taxpayers while also identifying unregistered entities for inclusion in the tax net.
– Standards for pan masala manufacturing are regulated under Food Safety and Standards regulations; however, no specific standards exist for gutka.

• Restrictions on Tobacco Use: Food safety regulations prohibit the use of tobacco or nicotine as ingredients in food products.

Indian Opinion Analysis

The detection of ₹104.38 crore worth of tax evasion underscores ongoing challenges faced by regulatory bodies in curbing illicit activities within the tobacco industry. While enforcement mechanisms like CGST zones and DGGI aim to improve compliance and tackle unregistered entities, gaps like the absence of standards for gutka suggest room for policy refinement.

Tobacco’s dual role-regulated as a taxable commodity but restricted under food safety laws-highlights its complex governance framework. Strengthening surveillance systems while addressing legal ambiguities may be crucial steps toward reducing revenue losses without stifling lawful buisness operations.Read more at The Hindu.