Acting on specific intelligence the Directorate General of Goods and Service Tax Intelligence, Headquarters (DGGI, Hqrs) has unveiled an unregistered Pan Masala/Guthka factory, being run in Delhi.

Searches were conducted at various places on 25.06.2020, including the unregistered factory, godowns and residence of main beneficiary. During the search, incriminating documents and electronic devices pertaining to the supply of Pan Masala/guthka without payment of taxes and duties were recovered. Preliminary investigation in the case has revealed the evasion of more than ₹ 40 crore till now.  Manufacturing, storing, sale and distribution of guthka is banned by Govt. of Delhi. The data from the seized documents has revealed that the unregistered factory was carrying out the operation even during the lockdown period.

The main beneficiary of the unregistered Pan Masala/Gutkha factory has been arrested on 27.06.2020 under the provisions of CGST Act, 2017. He was placed under judicial custody of 14 days.

Further investigation, in the case, is still under process.

Tax evasion via unregistered manufacturing uncovered; seizures and arrest triggered ongoing criminal tax investigation. Unregistered manufacture and distribution of Pan Masala/Gutkha was detected after targeted searches recovered documents and electronic records showing systematic supply without GST compliance and continued operation during lockdown; preliminary data indicated substantial tax evasion, the main beneficiary was arrested under tax enforcement provisions and remanded to judicial custody, and further investigation continues.