Size of gutka trade draws the taxman

When the finance department learnt that the consumption of gutka in the state is to the tune of Rs5,000 crore, it now has decided to take strict action against the stockists for sales tax evasion. The department officials have claimed that the tax paid by the dealers is a lot less than the consumption figures.
A delegation of tobacco retailers from the city met the deputy chief minister Ajit Pawar on Thursday to discuss various issues related to  gutka sale.

The delegation led by Sharad Rao, demanded the action against the gutka sellers to be scaled down. Rao told Pawar that the retailers were forced to violate Maximum Retail Price (MRP) norms in case of gutka products as the stockists do not follow the wholesale prices and sell them at higher prices.
Pawar bluntly refused to stop action against the retailers and also directed the finance department to initiate stern action against the evaders.

Rao told the minister that the consumption of the gutka in the state was to the tune of Rs 5000 crore per month and 35% of it was consumed in Mumbai alone. Officials from the finance department decided to act upon the evasion as the expected sales tax from the gutka trade was Rs500 crore. Rao claimed that the evasion of VAT was of Rs1000 crore and with an octroi of Rs350 crore.

Officials from the Legal Metrology department clarified in the meeting that it has no powers to act against the violation of MRP as the products under the weight of 10 grams do not come under the purview of the acts.  Hence, the government has decided to rope in other departments that have powers to act upon the errant stockists.