The Directorate General of GST Intelligence (DGGI), Meerut Zonal Unit (MeZU), which has pan-India jurisdiction, has unearthed a large, well-coordinated GST evasion racket involving clandestine trade in areca nuts (supari) valued at around Rs. 5,000 crore.
The investigation has exposed a nationwide syndicate engaged in the illegal procurement, transport and supply of areca nuts, primarily to pan masala and chewing tobacco manufacturers.
According to DGGI, huge quantities of areca nuts were sourced from the North-Eastern and southern states and transported into the Delhi/NCR region. From there, the goods were covertly supplied to manufacturers without proper documentation, completely bypassing the GST framework.
Investigators found that entities operating in Delhi/NCR adopted a highly sophisticated modus operandi. Bulk business-to-business (B2B) supplies of areca nuts—an item used almost exclusively as an industrial raw material—were falsely reported as retail business-to-consumer (B2C) sales in GST returns.
In reality, no such retail sales ever took place. The firms involved had no retail outlets or customer interface and functioned solely through godowns.
To conceal the actual movement of goods, fake B2C invoices, largely below the e-way bill threshold, were generated only to adjust stock records after the goods had already been clandestinely cleared. This method enabled the syndicate to avoid generating e-way bills and to mask the identity of the real buyers.
The DGGI investigation revealed that areca nuts were directly delivered to major pan masala manufacturing units without invoices or transport documents. Payments for these supplies were received entirely in cash through angadiyas and other informal channels.
This alone resulted in an estimated GST evasion of about ₹250 crore on the raw areca nuts. Officials noted that the actual revenue loss could be significantly higher, running into several thousand crores, as the illegally supplied raw material was further used to manufacture pan masala products that attract much higher GST rates along with compensation cess.
Search operations conducted at multiple locations across Delhi—including business premises, godowns, residences and transporter offices—led to the seizure of large quantities of unaccounted areca nuts, incriminating documents, handwritten registers, digital devices and transporter records. Physical stock verification revealed substantial shortages, conclusively establishing clandestine clearance of goods outside the GST system. Statements recorded from key persons, transporters and processing unit operators further corroborated the existence of a cash-based, invoice-free supply chain.
Following submissions by Senior Public Prosecutor Mr. Lakshya Kumar on behalf of the Government of India, the court remanded three key accused—Shivam Dwivedi, Dilip Kumar Jha and Sanjeet Kumar—to judicial custody. During the initial phase of the investigation, an amount of ₹7 crore has already been deposited with the government.
The DGGI has stated that the probe is still at a crucial stage and is now focused on identifying downstream beneficiaries, quantifying tax evasion at the manufacturing level, and uncovering the full extent of the syndicate. Further recoveries and attachment of assets are expected as the investigation progresses.
The action highlights DGGI’s intensified crackdown on organised GST evasion and its commitment to safeguarding government revenue under the GST regime.
Read More: JurisHour | Tax Law Daily Bulletin : February 2, 2026
