The Aryavarth Express
Agency(New Delhi): The Indian government has announced a 45-day extension for the implementation of a special registration and monthly return filing system for manufacturers of pan masala, gutkha, and related tobacco products, now set for May 15. This decision was made to facilitate better compliance with the Goods and Services Tax (GST) guidelines among businesses in this sector.
Initially scheduled to start on April 1, 2024, as per the directives from the Central Board of Indirect Taxes and Customs (CBIC), the new procedures aim to streamline the record-keeping, registration, and filing processes for these manufacturers. The GST law, amended through the Finance Bill 2024, includes a penalty of up to Rs 1 lakh for companies that fail to register their packaging machinery with the GST authorities from the specified date. However, this penalty has not yet been notified.
Manufacturers are required to report the details of their packing machines using Form GST SRM-I electronically within 30 days of the new system’s effective date. Additionally, they must submit a special return, Form GST SRM-II, by the 10th of every following month.
Rajat Mohan, Executive Director at Moore Singhi, noted that the GST Network has neither issued guidelines on the new procedure nor provided the necessary filing utilities, contributing to the decision to delay the implementation. Mohan emphasized that introducing such schemes at the start of the fiscal year would ensure smoother transitions and more effective compliance.
This policy revision follows recommendations from a GST Council report last year, chaired by Union Finance Minister Nirmala Sitharaman, which supported changing the levy of compensation cess on pan masala and chewing tobacco from an ad valorem to a specific rate-based system to improve initial revenue collection stages.