DGGI Busts Rs. 600 Crore Silver Trade Racket in Surat

The Directorate General of GST Intelligence (DGGI) has unearthed a massive unaccounted silver bullion and articles trading network in Surat, allegedly involving cash transactions exceeding ₹600 crore over the past three years.

The Surat Zonal Unit of the DGGI arrested bullion trader Yatin Shah earlier this week after detecting suspected Goods and Services Tax (GST) evasion of approximately ₹18 crore. Shah was produced before a local court and has been remanded to judicial custody.

200 Sq Ft Shop, Rs. 600 Crore Trade

What has stunned investigators is the scale of the alleged transactions carried out from a modest 200-square-foot shop located in Choksi Bazaar at Bhagal, a densely populated marketplace in Surat’s walled city area. Operating under the name “Sumati Silver,” the establishment outwardly projected itself as a seller of silver articles.

However, based on specific intelligence inputs, DGGI officers conducted search operations in October 2025 at both the business premises and Shah’s residence. During the searches, officials reportedly recovered incriminating documents, including parallel “kachha” challan books and related records that allegedly evidenced clandestine supply of silver bullion and silver articles without issuing proper tax invoices.

Parallel Books and Cash Transactions

According to officials, scrutiny of the seized documents revealed that the firm had allegedly made unaccounted taxable supplies worth more than ₹600 crore in the last three years. These supplies were reportedly executed in cash and without reflecting them in official GST returns, resulting in an estimated tax evasion of ₹18 crore.

Investigators found that substantial quantities of silver bullion and finished articles were sold without proper billing or payment of applicable taxes. A significant portion of the bullion is suspected to have been purchased by entities associated with leading jewellers in the city, raising concerns about a broader chain of undisclosed transactions in the jewellery supply ecosystem.

Multi-Level Tax Evasion Suspected

Precious metals, including silver, attract GST at the rate of 3%. Given the high intrinsic value of bullion, even a relatively small percentage of tax translates into large revenue implications. Officials believe that cash-based bullion transactions may have triggered a cascading chain of tax evasion—from bullion procurement to jewellery manufacturing and eventual retail sale.

Authorities indicated that the investigation extended for over four months, partly due to alleged non-cooperation from individuals linked to the network. The broader trail of jewellery transactions emanating from the unaccounted bullion trade is still under examination.

The case highlights the vulnerability of high-value commodity markets to cash-driven parallel trade, particularly during periods of price rally when investor and consumer demand for precious metals spikes.

Further investigations are ongoing to determine the full extent of the alleged evasion and identify other entities that may have benefited from the clandestine supply chain.