The Madhya Pradesh-based owner of “Karamchand” brand of paan masala, Basant Makhija, has been arrested by the Ahmedabad zonal unit of the Director General of the Goods and Service Tax Intelligence (DGGI) for alleged tax evasion of ₹ 95 crore from January 2019 to November 2020.
The accused has been remanded in judicial custody till December 22. He has been accused of illicit manufacture and supply of paan masala and zarda (chewing tobacco) from its manufacturing unit based in Gwalior without paying GST.
During search operations at various premises owned by Ashish Enterprises, the central revenue authorities unearthed tax evasion by the group, which illegally manufactured tobacco-based gutkha and supplied it as paan masala without paying the GST and cess on those products.
“The evidence gathered so far indicate that they have supplied Zafrani Zarda with every supply of paan masala in a ratio of 4:1, which means with supply of four bags of Karamchand paan masala in white colour bags, one bag of zafrani zarda in green colour bag has been supplied,” stated a release issued by the Vivek Prasad, Additional Director of DGGI, zonal unit in Ahmedabad.
“The verification of records and documents indicate that M/s Ashish Enterprises has made supply of the pan masala and zarda of Karamchand brand without cover of corresponding GST tax invoices amounting to taxable value of ₹89.67 during the period Jan-19 to Nov-20 and evaded GST payment with cess amounting to ₹ 94.54 crore,” stated the release.
The authorities have dubbed Mr. Basant as the main beneficiary, while his brother, Ratan, is the proprietor of the firm.
