Bengaluru, Aug 14 (PTI) The Karnataka Legislative Assembly on Thursday passed a bill to implement a track-and-trace mechanism to plug GST leakage in tobacco and arecanut products.

Piloting the Karnataka Goods and Services Tax (Amendment) Bill for the consideration of the House, state Revenue Minister Krishna Byre Gowda said there is a huge difference between sales and what's being declared.

With this bill, track-and-trace mechanism is being introduced into the value chain, using which all ingredients will be tracked, right from the primary product to the final product, and with the help of this, the volume of sales can be detected.

The Bill also aims to curb the misuse of input tax credit (ITC).

"Some people are illegally claiming ITC. There are ITC refund scams being widely reported. We need to apply a systemic fix for this...,” the Minister said.

Meanwhile, the Karnataka Decriminalisation (Amendment of Provisions) Bill was tabled in the Assembly.

The bill provides for tweaking 12 existing laws for “decriminalising and rationalising offences and to further enhance trust-based governance for ease of living and doing business”. PTI KSU ROH

Track-and-trace mechanism for tobacco and arecanut to prevent GST leakage and curb ITC misuse through supply-chain monitoring. Introduction of a track-and-trace mechanism in the tobacco and arecanut value chains to detect undeclared sales volumes and plug GST leakage by tracking all ingredients from primary product to final product, alongside measures to curb misuse of input tax credit and a parallel package to decriminalise and rationalise selected offences to enhance trust-based governance.