Finance Bill 2025 May Amend CGST Act to Introduce Track and Trace Mechanism for High-Evasion Goods

Last updated: 31 January 2025

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The forthcoming Finance Bill 2025 is set to introduce a Track and Trace Mechanism within the CGST Act to combat tax evasion on high-risk goods. Following GST Council recommendations, this system will require unique, tamper-proof identification markings on products, initially focusing on tobacco items. The aim is to trace goods from manufacture to sale, enhancing revenue collection and compliance.

The upcoming Finance Bill 2025 may include a significant amendment to the Central Goods and Services Tax (CGST) Act, 2017, introducing a Track and Trace Mechanism aimed at curbing tax evasion in high-risk commodities. This move follows recommendations made by the GST Council in its recent meeting, proposing the insertion of Section 148A in the CGST Act to provide a legal framework for implementing the system. Targeting High-Evasion Commodities The Directorate General of GST Intelligence (DGG

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FAQ :

The Finance Bill 2025 may amend the CGST Act to introduce a Track and Trace Mechanism for high-evasion goods, particularly tobacco products.

While the mechanism could apply to several high-evasion commodities, sources indicate a primary focus on tobacco-related products due to high tax rates and illicit trade.

Specified goods will need unique, non-sequential, non-predictable, tamper-proof, indelible, and clearly visible identification markings.

Manufacturers, wholesalers, and dealers will be required to record product movement. Retailers will be exempt from this specific requirement.

Violations may result in a penalty of ₹1 lakh or 10% of the tax payable, whichever is higher, and potentially a fee for generating unique identifiers.

The identifier will include details such as date, place, and factory of manufacture, machine used, production time, product description, MRP, intended market, and other mandated details.

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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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