GSTN Introduces Form To Record Input And Output To Tax Authorities For Tobacco Manufacturers

Rajat Mohan, Executive Director at Moore Singhi, highlighted that Form GST SRM-II mandates comprehensive monthly reporting of inputs and outputs

The GST Network (GSTN) has introduced a specialised form for manufacturers of pan masala and tobacco products to report their input and output procurements to tax authorities, aiming to curb evasion. This new form, GST SRM-II, was launched just a month after introducing the GST SRM-I form for registering machines belonging to such manufacturers.

GSTN updated its taxpayers on Friday: "The second form, namely Form GST SRM-II, is also available on the portal. Taxpayers dealing in the manufacture of Pan Masala and Tobacco products can now report the details of inputs and outputs procured and consumed for the relevant month.”

Rajat Mohan, Executive Director at Moore Singhi, highlighted that Form GST SRM-II mandates comprehensive monthly reporting of inputs and outputs.

"This form aims to enhance transparency and accountability in the manufacturing process of Pan Masala and Tobacco products. Taxpayers must meticulously document their procurement and consumption of inputs to avoid any discrepancies and ensure accurate tax filings," he added.

He further emphasised that taxpayers should acquaint themselves with the specifics and guidelines outlined in these forms to ensure smooth adherence and prevent potential penalties. Additionally, in January, the Central Board of Indirect Taxes and Customs (CBIC) unveiled a new registration and monthly return filing process to enhance GST compliance among manufacturers of pan masala and tobacco products. The process was initially slated for implementation on April 1. However, the deadline was extended to May 15.

The initiative to revamp the registration, record-keeping, and monthly filing procedures for such enterprises was intended to enhance GST compliance among pan masala manufacturers and tobacco products. The GST law also underwent an amendment through the Finance Bill 2024, stipulating that manufacturers of pan masala, gutkha, and similar tobacco products would face penalties of up to Rs 1 lakh if they neglect to register their packaging machinery with GST authorities, effective from April 1. The penalty provision has yet to be formally announced.

The procedure was designed to apply to manufacturers of various tobacco products, including pan-masala, unmanufactured tobacco (with or without a brand name and without a lime tube), 'Hookah' or 'gudaku' tobacco, smoking mixtures for pipes and cigarettes, chewing tobacco (without a lime tube), filter khaini, jarda-scented tobacco, snuff, and branded or unbranded Gutkha', among others.

Manufacturers of these tobacco products were mandated to electronically submit details of their packing machines used for filling and packing packages via Form GST SRM-I within 30 days of the notification's enforcement, i.e., by April 1, 2024. Subsequently, the input and output statement in GST SRM-II must be filed by the 10th of the following month.