Tracking Progress: Tobacco Industry's New Weapon Against Illicit Trade

The 2025-26 Union Budget introduces a 'track and trace mechanism' to curb illegal trade in high-risk commodities like cigarettes. This initiative aims to help enforcement agencies and boost the legal industry while reducing government revenue losses and supporting domestic tobacco growers adversely affected by smuggled goods.

The introduction of a 'track and trace mechanism' in the 2025-26 Union Budget aims to curb the illegal trade, particularly in the cigarette sector, the tobacco industry has stated. The mechanism will aid in controlling illegal activities, boosting industry growth, and supporting tobacco growers.

Finance Minister Nirmala Sitharaman announced amendments to the Central Goods and Services Tax Act, 2017, to enable this mechanism. It focuses on curbing tax evasion in high-risk commodities, with unique identification markings on packages that will track critical details about the goods' manufacture.

Tobacco Institute of India highlighted the severe impact of illicit cigarette trade, which constitutes one-fourth of the Indian market. The illegal trade leads to an annual revenue loss of Rs 21,000 crore and adversely affects domestic growers. The new budget measures aim to address these issues efficiently.

(With inputs from agencies.)