DGGI reveals more tax evasion by Kishore Wadhwani

The other issue that raises curiosity is how could the production continue during the lockdown. The revenue intelligence is reported to have detected nearly 200 telephone calls from the district administration to the manufacturers suggesting connivance of the authorities. At least 70 trucks were said to have been involved in transportation of the illegal goods. Wadhwani who is also into the newspaper business is said to have used "Press" stickers to disguise the product.

Director General of GST Intelligence (DGGI) has presented a written note to the court on Operation Cancer Phase 2, calling Wadhwani the "mastermind". In another blow to the government, Wadhwani has manufactured and sold cigarettes while recording only five per cent production in the documents. The resulting tax evasion has cost the government Rs 105 crore.

This assessment of tax evasion is currently from April 2019 to May 2020. The DG's office believes the forgery has been going on for a long time and tax evasion could be many times higher in the case.

Wadhwani is also involved in the illegal business of cigarette production. He was arrested from Mumbai on June 15. The investigation also revealed that different brands of cigarettes are produced in the name of Ellora Tobacco Company Limited, Indore.

In the third week of June, DGGI raided five different locations of the firm. During the last two financial years, the firm had deposited Rs 2.09 crore and Rs 1.46 crore as GST. DGGI discovered tax evasion of about Rs 105 crore in 13 months from April 2019 to May 2020. The fraud was apparently going on for a long time and the tax evasion could be many times more than Rs 105 crore. The product was being stored in secret warehouses.

Investigations revealed that raw material was being procured secretly and the product was dispatched through secret passages to avoid both excise and GST.

Machines were run with generators to conceal production from the department. The MRP of the seized goods was shown as Rs 27 crore. Cigarette packs were being sold for Rs 10 each while the excise payable on each pack was Rs 30. The packing material found in the warehouse was enough for packing 5,000 cartons. Authorities suspect many warehouses may be in Indore and surrounding areas.

The DGGI says that the accused has fraudulently shown his newspaper's circulation to be 1,20,000 while the real circulation was just 4,000 to 6,000. Profits earned from pan masala business are being mixed up with that of the newspaper.

The remand for the accused ends on June 30.