GST authorities detect ₹960 crore of tax evasion by tobacco, pan masala makers

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The Directorate General of GST Intelligence (DGGI) has unearthed tax evasion worth 960 crore in two instances involving clandestine supply of tobacco products and pan masala, according to an official update.

In one of the instances, DGGI officials in Jaipur detected 870 crore worth of evasion by clandestine manufacture and supply of tobacco products.

The case involved issue of GST invoices to non-existing firms and one person has been arrested so far, Central Board of Indirect Taxes and Customs (CBIC) said in an update on its website. In this case, 10 crore has been recovered by the authorities.

In another instance, DGGI officials in Ahmedabad detected a case of clandestine production and supply of pan masala and scented tobacco products. This case involves alleged tax evasion of about 90 crore, as per the update. In this case 25 crore has been recovered, CBIC said.

Tobacco products placed in the 28% GST slab and attract a cess as well, making it an item of interest to tax evaders. Data analytics and sharing of data among various regulatory agencies are aiding the authorities to detect instances of tax evasion.

Since GST is a technology heavy tax system, it is difficult for wrongdoing companies to keep all their operations entirely out of sight of the tax authorities as some part of the supply chain will come under the spotlight.

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