GST Authorities Expose Rs 104 Crore Tax Evasion in Illicit Tobacco Trade

GST officials detected 61 cases of tax evasion involving tobacco products, including cigarettes and pan masala, worth Rs 104.38 crore in the first quarter of FY26, government data shows.

Between April and June 2025, the Directorate General of GST Intelligence (DGGI) and other agencies uncovered the cases. Customs and the Directorate of Revenue Intelligence (DRI) also seized nearly 3.93 crore sticks of smuggled cigarettes.

Data reveals cigarette smuggling more than doubled in volume and value between 2019-20 and 2023-24. Experts say high-value, high-tax items like tobacco, alcohol, and gold remain top smuggling targets.

To tighten monitoring, the government has mandated detailed reporting for tobacco producers and introduced amendments enabling a track-and-trace system with penalties.

Meanwhile, a Group of Ministers has proposed replacing the current four GST slabs with two rates, 5% and 18%. Prime Minister Modi recently said GST reforms will bring relief to the poor and middle class ahead of Diwali.