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DGGI, GST Investigation Arm, Book Pan Masala and Tobacco manufacturing unit for Rs 40 Crore Tax Evasion

By Ghazal Bhootra      08 July, 2020 01:45 PM      0 Comments
DGGI GST PanMasala Tobacco

Directorate General of Goods and Service Tax Intelligence (DGGI), Goods and Service Tax’s (GST) investigative agency discovered Rs 40 crore of evasion of tax by an unregistered pan masala and gutkha (betel quid) manufacturing unit in Delhi, the national capital on June 25, 2020.

Even though, storing, selling, manufacturing, and distributing of gutkha is banned by the national capital’s government, data recovered from the documents that were seized show that the factory, which was unregistered with the government, was executing their operations and activities even during the lockdown period, which started on March 23, 2020, owing to the coronavirus pandemic. 

The government of Delhi had extended the ban on the manufacture, storage, sale, or distribution of gutkha, pan masala, and any other tobacco products in the national capital. This however did not apply to cigarettes. The Food Safety Department had issued a notification extending the ban on these products, this notification had been issued by Food Safety Commissioner LR Garg.

Based on input from the special intelligence unit, the Directorate General of Goods and Service Tax Intelligence (DGGI) executed many searches in the company's manufacturing unit, an official statement said.

"Searches were conducted at various places on June 25, 2020, including the unregistered factory, godowns, and residence of the main beneficiary.”

"During the search, incriminating documents and electronic devices pertaining to the supply of pan masala/gutkha without payment of taxes and duties were recovered. Preliminary investigation in the case has revealed the evasion of more than Rs 40 crore till now," the statement stated which was published on June 25, 2020, by the Directorate General of Goods and Service Tax Intelligence (DGGI).

The forefront and the main beneficiary of the illegal pan masala and gutkha factory, which was unregistered, was arrested on June 27, 2020, under the provisions of Central Goods and Service Tax (CGST) Act, 2017, and placed under judicial custody of 14 days, till 11 July 2020.

The statement also added that further investigation was being carried out for the unregistered factory by the GST’s investigative arm, Directorate General of Goods and Service Tax Intelligence (DGGI) in the national capital.



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