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Special tax of 38 percent will be imposed on Gutkha-Pan Masala! The committee presented the proposal

Tax on Pan Masala: A Group of Ministers (GoM) has proposed to impose 38 per cent ‘specific tax based duty’ on gutkha-paan. If this is approved, the government will get more revenue by eating khutkha and pan masala. This tax will be linked to the retail price of these items. At present, 28 percent GST is levied on these items and compensation charges are levied according to their price.

In fact, the Goods and Services Tax (GST) Council had asked a group of ministers to consider imposing capacity-based taxation on these tax-evading items. After this, the committee of ministers headed by Odisha’s Finance Minister Niranjan Pujari has presented its report and asked to impose 38 per cent tax.

Tax evasion will be curbed

According to a report in Business Standard, if this report presented by the committee is approved, it will help in preventing tax evasion on Gutkha-Pan Masala items. Tax evasion can be stopped at the retail trader and supplier level. Along with this, the revenue will also increase.

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What did the committee say in the report

Quoting the report of the Business Standard Committee, it has been said that small and retail traders do not come under the purview of GST registration, due to which tax evasion is increasing in the chain after the supply of such things. In this case, there is a need to levy specific tax based charges. The GoM has proposed 38 percent special tax on items like pan masala, hookah, chillum, chewing tobacco, which can range from 12 percent to 69 percent of the retail sale price of these items.

Who will have to pay how much tax

Suppose Rs 1.46 is paid by the manufacturer on a packet of Pan Masala worth Rs 5, Rs 0.88 tax is paid by the distributor and retailer, then the total tax will be Rs 2.34. According to the proposal presented there, the tax will increase, but will be within Rs 2.34 only. This means that Rs 2.06 tax will be paid by the manufacturer, Rs 0.28 tax by the distributor and retailer.


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