Overview
- The new levy taxes production capacity rather than sales, requiring manufacturers to register machines and file monthly self-assessed returns by the seventh.
- Tiered rates apply per machine speed and pouch weight, with examples ranging from about ₹1.01 crore a month for slower lines to much higher sums for faster ones, and ₹11 lakh per month for wholly manual factories.
- Authorities are empowered to audit, inspect, and conduct search-and-seizure, with penalties for non-compliance and criminal prosecution for large evasion above ₹1 crore.
- Pan masala will attract 40% GST as the compensation cess ends, this cess is charged over and above GST, and tobacco products are being addressed separately through higher excise under a recently passed amendment.
- The government says proceeds will be shared with states for health schemes and will not touch essential commodities, while opposition parties sought referral to a select committee citing MSME, enforcement and federal revenue concerns; as a money bill, the Upper House can only offer recommendations.