Releasing a joint study by FICCI and Committee Against Smuggling and Counterfeit Activities Destroying Economy (CASCADE), Agrawala said along with consumer awareness, there is a need to have a strong set of standards and enforcement mechanism.
The study has estimated an annual tax loss of Rs. 26,190 crore to the exchequer and an overall annual sales loss of Rs. 1 lakh crore to the industry due to tax evasion, counterfeiting and smuggling.
While the highest revenue loss to the industry is from the FMCG sector (packaged goods) at Rs. 20,378 crore, the tobacco sector accounts for the highest revenue-to-tax percentage loss to the government, at over 60%.
Tax arbitrage is considered one of the key contributors to the menace of smuggling and counterfeiting.
Agrawala said the government is deeply concerned over complexity in financial sector, and a proper regulatory regime needs to be in place to protect the consumers.
He said the government has issued an order on Thursday towards having standard packaging of bottled drinks and beverages in order to ensure correct and standard measurement of contents across the board.