| 4 crore illicit cigarettes seized in six months, Rs 104 crore tax evasion detected | | Crackdown On Tobacco Mafia | | atul sharma
Early Times Report
Jammu, July 22: Union Minister for Commerce and Industry Jitin Prasada informed Parliament on Tuesday that enforcement agencies have seized nearly 3.93 crore illicit cigarette sticks in just the first quarter (April–June 2025) of the current financial year. These seizures were carried out by Customs Field Formations and the Directorate of Revenue Intelligence (DRI).
In addition, the Central Goods and Services Tax (CGST) zones and the Directorate General of GST Intelligence (DGGI) detected 61 cases of tax evasion involving gutkha, chewing tobacco, cigarettes, and pan masala, amounting to a total evasion of ₹104.38 crore during the same period.
Responding to concerns raised over the growing illicit tobacco market, Prasada outlined a series of steps taken by the government to curb illegal trade and protect both public health and revenue interests. While year-wise revenue loss figures since 2015 were not shared, the minister emphasized the scale of enforcement and regulatory reforms undertaken.
To tighten control over the sector, the government has introduced a special compliance mechanism for manufacturers of tobacco products, including pan masala, gutkha, unmanufactured tobacco, hookah, snuff, and more.
This includes mandatory machine registration, monthly production reporting, and technical validation certificates for machinery.
These provisions are designed to enable real-time monitoring of production and machinery usage, thereby discouraging under-reporting and clandestine manufacturing.
Further bolstering this effort, the Finance Act 2025 amended the Central GST Act to introduce a track-and-trace mechanism for specified goods. The new provisions empower authorities to monitor product movement across the supply chain and impose dedicated penalties for non-compliance.
As a signatory to the WHO Framework Convention on Tobacco Control (FCTC) and its Protocol to Eliminate Illicit Trade in Tobacco Products, India is aligning with global best practices. In partnership with the Ministry of Health and Family Welfare, the Department of Revenue is rolling out the mandated Article 8 track-and-trace system to improve transparency and reduce the availability of untaxed tobacco products.
The illicit cigarette market, estimated to comprise 25% of India’s total cigarette consumption, continues to threaten public health efforts and cause substantial revenue loss. Experts attribute this in part to the high tax burden on legal cigarettes—including 28% GST, compensation cess, and the National Calamity Contingent Duty (NCCD)—which has inadvertently made illicit products more attractive to consumers.
The government’s multi-pronged strategy—encompassing enforcement, technology-driven oversight, and international cooperation—is aimed at dismantling this parallel black-market economy, while supporting its larger goals under the WHO FCTC to reduce tobacco consumption and its associated harms. |
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