The GST Network (GSTN) has launched a new form, GST SRM-II, aimed at manufacturers of pan masala and tobacco products to enhance transparency and prevent tax evasion. This follows the earlier introduction of GST SRM-I, which is used for registering manufacturing machines.
Introduction of GST SRM-II
According to a GSTN update on June 7, the new form is now available on the portal:
“The second form, Form GST SRM-II, is now available on the portal. Taxpayers involved in the manufacture of Pan Masala and Tobacco products can report the details of inputs procured and outputs consumed for the relevant month.”
This form mandates detailed monthly reporting of inputs and outputs. An expert explains that this initiative aims to improve transparency and accountability in the manufacturing processes of pan masala and tobacco products:
“Taxpayers must carefully document their procurement and consumption to prevent discrepancies and ensure accurate tax filings.”
Manufacturers are encouraged to familiarize themselves with the instructions and details in these forms to ensure smooth compliance and avoid potential penalties.
Background and Implementation
In January, the Central Board of Indirect Taxes and Customs (CBIC) announced a new registration and monthly return filing procedure to enhance GST compliance for manufacturers of pan masala and tobacco products, effective from April 1. This deadline was later extended to May 15.
The revamped procedures for registration, record-keeping, and monthly filing aim to enhance GST compliance. According to the Finance Bill 2024, manufacturers of pan masala, gutkha, and similar tobacco products will face penalties of up to ₹1 lakh if they fail to register their packing machinery with GST authorities from April 1. However, this penalty provision is yet to be notified.
New Compliance Requirements
The new procedures apply to various tobacco and pan masala products, including:
- Pan masala
- Unmanufactured tobacco (without lime tube), with or without a brand name
- ‘Hookah’ or ‘gudaku’ tobacco
- Smoking mixtures for pipes and cigarettes
- Chewing tobacco (without lime tube)
- Filter khaini
- Jarda scented tobacco
- Snuff
- Branded or unbranded ‘Gutkha’
These manufacturers must electronically furnish details of their packing machines in Form GST SRM-I within 30 days of the notification’s effective date, i.e., April 1, 2024. The input and output statement, GST SRM-II, must be filed by the 10th of the succeeding month.
For detailed information, refer to Notification No. 04/2024 – Central Tax dated 05-01-2024. This notification introduces two forms:
- GST SRM-I: Pertains to the registration and disposal of machines. It has been available on the portal since May 15, 2024.
- GST SRM-II: Requires information on inputs and outputs during a month and is now also available on the portal.
Conclusion
Manufacturers dealing in pan masala and tobacco products must ensure compliance with these new reporting requirements. By doing so, they can avoid penalties and contribute to a more transparent and accountable tax environment.
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