GST evasion caught: Rs 105 cr tax fraud in yet another cigarette smuggling case; more recovery expected

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Published: June 22, 2020 3:42 PM

The GST intelligence officials have detected tax evasion of Rs 105 crore in a year by a cigarette manufacturer in Indore.

cigarette smuggling, gst evasion of Rs 105 crore, illicit cigarette, tobacco, tax evasionThe Directorate General of GST Intelligence unearthed that less than 5% of the production was accounted for last many years and even for the accounted production, the major buyers were fictitious.

After the government indicated a sudden spike in cigarette smuggling during the nationwide lockdown, the GST intelligence officials have detected tax evasion of Rs 105 crore in a year by a cigarette manufacturer in Indore. The cigarette manufacturing firm was using back door entry and exit to build inventory and supply the final products, the Additional Director General, DGGI Bhopal, said in a statement on Monday. The officials have also suspected that similar evasion has been done during the remainder of GST and erstwhile central excise periods also, which would take the amount involved in the GST evasion to a much higher level.

The Directorate General of GST Intelligence unearthed that less than five per cent of the production was accounted for last many years and even for the accounted production, the major buyers have been found to be fictitious. To justify his illicit incomes, the tax evader used to show exaggerated circulation of newspapers, which was his other business. He declared his circulation of newspaper copies at 1.2-1.5 lakh per day while actually circulation was only 4,000-6,000 per day.

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The investigations have also revealed that the seized packing material is sufficient to pack 5000 cartons, where each carton can pack 12,000 cigarettes. These cartons are sufficient to sell cigarettes worth Rs 27 crore, the official statement said. The investigating team has further suspected that there may be a large number of other such undeclared godowns around Indore,  which the officials are attempting to locate.

FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) had recently highlighted that the enforcement agencies have investigated many cases related to cigarette smuggling and seized imported cigarettes in the last few months. It also underlined that cigarette smuggling has shot up during the coronavirus-led lockdown.

Meanwhile, the Central Board of Indirect Taxes today tweeted that Indian customs across all zones have been vigilant through the lockdown to prevent smuggling of contraband, narcotics, etc. Seizures have ranged from ecstasy pills to cannabis, ensuring safety from the drug menace, it added.

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