The Union Finance Minister Nirmala Sitharaman chaired the 55th meeting of the GST Council today (21st December 2024) at Jaisalmer, Rajasthan. The council recommended inserting an enabling provision in the Central Goods and Service Tax (CGST) Act, 2017 through Section 148A to empower the government to enforce the Track and Trace Mechanism for specified evasion-prone commodities. The system shall be based on a unique identification Marking which shall be affixed to the said goods or the packages thereof. This will provide a legal framework for developing such a system and will help in the implementation of mechanisms for tracing specified commodities throughout the supply chain. Know When to Say No to Cash Transactions, Click Here It will lessen the potential for tax avoidance by tracking the entire supply chain. Also makes it easier to spot inconsistencies in manufacturing, shipping, or selling.

It will reduce revenue losses brought on by underreported sales or fictitious input tax credit (ITC) claims.  By deterring illegal trade practices like the sale of counterfeit goods, this mechanism guarantees fair competition. It gives authorities the thorough information they need to carry out focused audits and investigations. By encouraging traceability and transparency, this system increases consumer confidence in the legitimacy of products. Companies may have to pay more to integrate technology and adjust to new regulations. For taxpayers, especially small and medium-sized businesses (SMEs), the system may initially raise compliance requirements. User flexibility and a strong technological foundation are essential for successful implementation. Know When to Say No to Cash Transactions, Click Here One important step in using technology to stop tax evasion is the implementation of Section 148A under the CGST Act, 2017. It is anticipated that the Track and Trace Mechanism will improve revenue collection, strengthen tax compliance, and stop illegal trade.

To overcome obstacles and guarantee the mechanism’s success, however, meticulous planning, stakeholder involvement, and phased implementation will be necessary. In addition to Chief Ministers from Goa, Haryana, Jammu and Kashmir, Meghalaya, and Odisha, as well as Deputy Chief Ministers from Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana, the meeting was attended by Union Minister of State for Finance Shri Pankaj Chaudhary and Revenue Secretary Ajay Seth.