MP EOW books gutka company directors for Rs 1900 cr GST fraud

    BHOPAL: Madhya Pradesh Economic Offence Wing (EOW) on Thursday booked four directors of Kaipan Pan Products Private Limited for allegedly evading GST (goods and services tax) to the tune of Rs 1900 crores by fraudulent means.

    EOW had raided business establishments of the prominent pan masala and gutka manufacturers in Bhopal, Indore and Gwalior following complaints of massive tax evasions. Several child labourers were rescued during the operation, say officials.

    “Timing of raid was very important. We found labours working at 4.30am. What kind of shift is it? There were no records of stock, materials and labours working in the unit. We have enough evidence to prosecute them,” said an EOW officer wishing anonymity.

    When contacted, EOW DG Sushovan Banerjee confirmed the action and said strong action would be taken against those involved. Directors have been booked under section 420 (forgery), 120 (criminal conspiracy) of IPC or and 122 of GST Act.

    Raids were conducted at factories of some of the top brands in Govindpura around 4.30am. Separate teams had raided other gutka companies in Indore and Gwalior. The raid team in the state capital was led by EOW SP Arun Mishra. Ready stocks worth more than Rs 5 crore were found at these units. EOW had shortlisted these companies immediately after chief minister Kamal Nath ordered a crackdown last week.

    On January 3, in his first meeting of the year with bureaucrats, CM Nath had said: “Shudh Ke Liye Yudh is a massive drive that is gathering popularity through public support. But there needs to be action against gutka and paan masala sellers, apart from cartels involved in the manufacture and supply of fake medicines.”.

    “Unaccounted’ packs are sent off to different destinations. They have 40 labourers only to load packs of gutka pouches in trucks, so you can imagine the amount of gutha that is produced and supplied from this factory alone.”

    Knowing that the clandestinely produced gutka is loaded in trucks early in the morning, the EOW team raided at 4.30am. As they detected more illegal activities — like child labour and mixing of tobacco in gutka— personnel from departments like labour, revenue, commercial tax, excise, central excise and police also joined the operation.

    Officials say the government had been trying to plug leakage of revenue from gutka and tobacco companies. Excise duty is calculated under ‘Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008’, modified in 2010, and ranges from Rs 14 lakh to Rs 77 lakh, depending upon the price per packet of pan masala (non-tobacco) and production capacity of machines. For flavoured supari, the tariff is charged on MRP. Duty is calculated at 2.36% per packet, excluding 35% abatement.

    It is alleged that the companies had been underreporting the capacity of their machines in collusion with a section regulatory officials.

    Company officials tried to argue that some of the machines were not in use. “Each and every machine was in use when unit was raided. Number of labours made it clear that the production was being under reported,’ said the EOW officer adding mismatch has been found in the declaration and production capacity of machines,” said the officer.

    Source- Times of India.

The post MP EOW books gutka company directors for Rs 1900 cr GST fraud appeared first on GST Station.

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