India Moves Forward with Track and Trace on Cigarettes

In India, cigarettes are expected to be among the first products to be brought under a track and trace mechanism aimed at curbing tax evasion, following amendments to the Central Goods & Services Tax (GST) Act. Pan masala (a popular chewing mixture) may also be included in the initiative.

A GST Council statement explained that the system will involve a unique identification marking affixed to goods or their packaging, which will enable authorities to trace the movement of the goods across the supply chain.

Although tax evasion is prevalent across several sectors in India, cigarettes have been given priority over other sectors due to the tobacco industry’s vulnerability to leakages. For example, in 2024, the Central Board of Excise and Customs confiscated over 90 million smuggled cigarettes, valued at $21 million. According to industry estimates, the government loses $2.4 billion annually to the illicit cigarette trade.

The World Health Organisation (WHO) has also advocated for track and trace mechanisms under the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products, which India ratified in 2018. In fact, India, together with most of the other parties to the Protocol should have already implemented tobacco track and trace in 2023, in line with the provisions of this international treaty.