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GST levy based on capacity on pan masala, gutkha unlikely

GST levy based on capacity on pan masala, gutkha unlikely

A plan to levy goods and services tax (GST) on pan masala and gutkha on the basis of installed manufacturing capacity may be dropped due to the difficulties in administering the input tax credit (ITC) mechanism, sources told FE.

In May 2021, the GST Council had set up a group of ministers (GoM), led by Odisha finance minister Niranjan Pujari, to examine the feasibility of levying GST on products such as pan masala and gutkha, on the basis of the installed capacity, rather than actual production. This was in view of large-scale tax evasion detected by under-reporting of output by the units

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