Searches unearth 60 kg of unaccounted gold

Commercial Tax officials find suppression of GST to the tune of ₹ 1.3 crore

In one of the biggest searches on jewellers, commercial tax officials unearthed 60 kg of unaccounted gold ornaments worth nearly ₹21 crore that involved suppression of GST to the tune of ₹1.3 crore.

The surprise searches in the Chickpet area, which houses a large number of gold and silver jewellers, on Tuesday were based on information that was cross-checked with the data available with the department. The inspection and searches were conducted on 23 jewellers in Ranganatha Mansion and Sakalajee Market, and 60 kg of gold jewellery in their stock did not have valid documents.

“The dealers were showing less turnover. An analysis of their input tax credit and turnover made us suspicious,” said M.S. Srikar, Commissioner, Commercial Tax.

This follows a similar modus operandi used by silver traders in Raja Market on Avenue Road, and the department had unearthed unaccounted silver ornaments in December 2019.

The modus operandi was that gold traders from other States supplied jewellery to local traders without an invoice. During the inspection, the officials caught two persons carrying 3.5 kg of gold ornaments in their bags without valid documents.

“The department is keeping an eye on inter State movement of gold and silver jewellery without invoice,” Mr. Srikar said.

According to Additional Commissioner (Intelligence) Nitesh Patil, the department got the information that gold and silver jewellery were being carried by persons travelling by bus and trains from Mumbai, Coimbatore, Chennai and a few places in Kerala.

“E-way bills have been exempted for gold and silver articles for reasons of safety. These persons were misusing the exemption. Transactions between those bringing these articles from other States and the wholesale dealers in Bengaluru were taking place without any document,” he added.

During the search and inspection of business premises of wholesalers, officials found that a portion of the business was conducted without documents, and excess and unaccounted stock was a testimony to this.

“Persons carrying jewellery come to wholesalers with jewellery in the guise of showing them designs, but end up selling the jewellery to them without documents. Such transactions happen only with trusted and known customers,” Mr. Patil said.

In all, the department collected GST at the rate of 3% and similar amount as penalty, all totalling ₹1.3 crore.

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