The Centre has unearthed 61 cases of tax evasion involving tobacco-based products like gutka, cigarettes, chewing tobacco, and pan masala, amounting to over ₹104 crore in losses to the exchequer in just the first quarter of the current financial year, Parliament was informed on Friday.
In a written statement to the Lok Sabha, Minister of State for Health, Prataprao Jadhav, cited data from the Department of Revenue, noting that such illicit activities are covert in nature and therefore difficult to quantify precisely. However, enforcement agencies including the Central Goods and Services Tax (CGST) zones and the Directorate General of GST Intelligence (DGGI) have been actively cracking down on offenders.
“Until June 2025, a total of 61 cases involving gutka, pan masala, cigarettes, and chewing tobacco have been detected, with tax evasion pegged at approximately Rs. 104.38 crore,” Jadhav stated.
Responding to a query about the scale of illicit trade and unregulated manufacturing in the Zarda (chewing tobacco) sector, the Minister acknowledged that the illegal tobacco trade remains a significant challenge for tax enforcement.
To address the issue, officers from the CGST and DGGI have been instructed to closely monitor compliance among registered manufacturers and to identify and bring unregistered producers under the tax framework, Jadhav said.
On the regulatory side, the Minister noted that standards for pan masala are outlined under sub-regulation 2.11.5 of the Food Safety and Standards (Food Product Standards and Food Additives) Regulations, 2011. Manufacturers must adhere to these norms. However, there are currently no specific food safety standards set for gutka.
Additionally, the Food Safety and Standards (Prohibition and Restriction of Sales) Regulations, 2011, categorically ban the inclusion of tobacco and nicotine in food products.
The revelations come amid growing public health concerns and underscore the government’s continued efforts to tighten regulatory oversight over the tobacco sector, both to safeguard health and recover lost revenue.
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