Lok Sabha Question No. 457 (UNSTARRED), answered on 2025-07-22
Subject: Illicit Tobacco Market
Ministry: COMMERCE AND INDUSTRY
Asked by: Shri Manish Tewari

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 457

ANSWERED ON 22.07.2025

## ILLICIT TOBACCO MARKET

## 457.    SHRI MANISH TEWARI :

Will the Minister of COMMERCE & INDUSTRY ( वाणिज्य और उद्योग मंत्री ) be pleased to state:

- (a) whether the Government is aware of the alarming rise in the illicit tobacco market, if  so,  the  details  thereof  along  with  the  year-wise  estimated  revenue  of  the  illicit tobacco market, since 2015;
- (b) the estimated revenue loss to the Union Government due to the smuggling and illegal trade of tobacco products during the last ten years, State and year-wise;
- (c)  the  steps  taken  to  curb  the  illegal  tobacco  trade,  including  measures  to strengthen enforcement and prevent tax evasion;
- (d) whether the Government has conducted any study on the impact of high taxation on tobacco products and its role in driving illicit trade;
- (e)  if  so,  the  details  thereof  along  with  the  findings  thereof  and  if  not,  the  reasons therefor; and
- (f)  whether  the  Government  is  considering  any  policy  measures  to  balance  public health  objectives  with  the  economic  impact  on  legal  tobacco  farmers  and  industry stakeholders, if so, the details thereof?

## ANSWER

वाणिज्य और उद्योग मंत्रालय में राज्य मंत्री ( श्री णिणिन प्रसाद ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI JITIN PRASADA)

(a) to (f): Customs Field Formations and Directorate of Revenue Intelligence (DRI) have seized around 3.93 crore sticks of cigarettes in the current financial year upto June, 2025. Further, CGST  zones  and DGGI  have detected 61 cases of

Guthka/Chewing  Tobacco/Cigarettes/  Pan  Masala  involving  tax  amounting  to  Rs. 104.38 crores approximately in the current financial year, upto June 2025.

The Government has introduced a special mechanism for manufacturers of tobacco products  and  related  products  which  covers  certain  categories  of  goods  including pan masala, various forms of tobacco (unmanufactured, hookah, chewing tobacco, snuff, gutkha) and tobacco preparations, requiring manufacturers to furnish detailed information  about  manufacture  within  specified  timelines.  The  system  mandates registration for each  machine,  monthly  reporting  and  requires  certificates  for technical  validation  for  machines  as  well,  providing  a  real-time  monitoring  of production  capacity  and  machine  operations  to  track  the  illicit  manufacture  and supply of tobacco and related products. The Central Goods and Services Tax Act has  been  amended  by  Finance  Act  2025,  which  empowers  the  Government  to establish a comprehensive track and trace mechanism for specified goods. Further, to ensure strict compliance with the track and trace provisions, a penalty specifically for violations of track and trace mechanism has been introduced.

Government of India is a party to World Health Organization Framework Convention on  Tobacco  Control  (WHO  FCTC)  and  has  ratified  the  Protocol  to  Eliminate  Illicit Trade in Tobacco Products, adopted under the (Article 15) of WHO FCTC. Ministry of Health and Family Welfare is working with Department of Revenue, Government of India for the implementation of Track and Trace Mechanism for Tobacco Products in accordance with Article 8 of FCTC Protocol.

******