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GST intelligence cracks whip on pan masala manufacturers, detects over Rs 500 cr tax evasion

In order to protect government revenue, six immoveable properties and 14 bank accounts have been provisionally attached as part of the investigation proceedings by the officials of Directorate General of Goods and Services Tax Intelligence (DGGI) here

twitter-logoPTI | July 3, 2020 | Updated 18:27 IST
GST intelligence cracks whip on pan masala manufacturers, detects over Rs 500 cr tax evasion
Goods and Services Tax

GST intelligence officials carried out more than 50 search operations in the last one month at various premises of pan masala and cigarette manufacturers in Indore and detected tax evasion worth over Rs 500 crore, according to an official statement issued on Friday.

In order to protect government revenue, six immoveable properties and 14 bank accounts have been provisionally attached as part of the investigation proceedings by the officials of Directorate General of Goods and Services Tax Intelligence (DGGI) here.

"Operation Kark to counter illicit sale of pan masala/tobacco/cigarettes, which was initiated on 30th May, has till now detected GST evasion of about Rs 512 crore in last one year (period), while five people have been arrested in this operation," the statement issued by Additional Director General, DGGI, here said.

In the last one month period, the officials of central GST intelligence have conducted as many as 53 searches under this operation, it said.

The operation has been named ''Kark'' -- considering the high Goods and Services Tax (Kar in Hindi) loss and the reported adverse effects of consuming illicit tobacco not subject to food and safety standards leading to high prevalence of oral cancer (Kark) in India.

Officials said that the sleuths part of the searches acted as corona warriors by conducting operation in parts of Indore affected by the deadly coronavirus pandemic.

In a recent operation, the GST intelligence officials had detected tax evasion of Rs 105 crore by a cigarette manufacturing firm in Indore in the last one year.

As a result of searches conducted in the last week of June, additional evidence suggests that the GST evasion for the period April 2019 to May 2020, by the firm is Rs 270 crore, according to the statement, adding that the amount may rise further.

"A search by officials of central GST intelligence was conducted on June 25, 2020 at the premises of the supplier of filters used in (manufacture of) cigarettes (by the Indore based firm)," it said.

Investigations revealed that this unit had declared, on invoices, to have provided filters to three dummy firms. Whereas, the filters had been supplied to only one firm, which was searched by the officials, the statement said.

One of the proprietors of the dummy firm was found to be an employee of a media organization run by the accused running these illegal units, it said.

On June 29, three immovable properties located at Indore and nine bank accounts belonging to the accused and his associate companies involved in GST evasion were provisionally attached, the statement said.

"As many as seven people which include directors of the companies (manufacturing cigarettes), transporters and their representatives, key associates in the GST fraud are presently absconding or not appearing under formal summons and are not cooperating with the legal proceedings," the DGGI said.

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