GST evasion: Sanitisers worth ₹20.40 crore seized, three arrested in Madhya Pradesh

About 14 lakh litres of hand sanitisers were supplied without issuing invoice for payment of GST, amounting to about ₹8 crore, says an official

The Directorate General of GST Intelligence (DGGI) in Bhopal has seized branded alcohol-based hand sanitisers worth ₹20.40 crore and arrested three persons for allegedly evading tax through clandestine production, supply and sale.

“The sanitisers were being produced by SOM Distilleries Private Limited (SDPL), located at Sehatganj village in Raisen. About 14 lakh litres of hand sanitisers were supplied without issuing invoice for payment of GST, amounting to about ₹8 crore. As the investigation progresses, the figure may go up,” said an official.

Among those arrested under the Central GST Act are the directors and owners of the SOM Group. The agency has carried out searches in Bhopal, Sagar, Delhi, Gurugram, Siliguri, Kolkata, Jodhpur and various other cities across India in the past two weeks. The operation is still continuing.

Acting on a tip-off, the DGGI officials first zeroed in on the factory and office premises of the SDPL. Preliminary investigation indicated that during the lockdown period, the company had also produced alcohol-based hand sanitisers, which may have been allegedly removed clandestinely without payment of GST at the rate of 18%.

Based on the findings, the officials then searched the premises of Biscuit Basket Foods Private Limited in Sehatganj. “This biscuit factory is owned by a close relative of the owners of SDPL. This resulted in the seizure of unaccounted and non-GST paid sanitisers of brand name Genius, manufactured by SDPL, with a total declared retail price of ₹13.23 crore,” said the official.

According to the DGGI, the sanitiser stock of Genius brand valued at ₹5.92 crore — also supplied without issuing any invoice/GST payment and stored on the premises of SOM Distilleries and Breweries Limited at Rojrachak village in Raisen — was also seized. Subsequently, follow-up searches were conducted in other parts of the country.

“The quantum of tax evasion is suspected to increase considering that hand sanitisers are suspected to have been supplied in bulk, stored in drums and tankers, for which the probe is still under way,” the official said.

Another modus operandi of possible GST evasion was detected during the searches, said the agency. Wort (malt), an intermediate product in the brewery process, is suspected to have been cleared from the brewery to distillery clandestinely, without paying tax.

Wort, a liquid extracted from the mashing process, contains sugars that are fermented using the brewing yeast to produce alcohol.

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