In a major crackdown on tax evasion, the Goods and Services Tax (GST) officials arrested a partner of a renowned retail jewellery firm in Pollachi for allegedly evading GST amounting to Rs 6.53 crore. The firm was found involved in clandestine gold and silver transactions without issuing GST invoices.
On the basis of specific intelligence collected and developed by the officers of CGST Coimbatore Commissionerate headed by Dinesh P. Pangarkar, Principal Commissioner, multiple searches were conducted in the premises of a Pollachi based renowned retail jewellery firm and its wholesale suppliers in Coimbatore in February, 2025.
GST Evasion Uncovered Through Intelligence Input
The arrest followed intelligence inputs received by the GST department regarding large-scale tax evasion by the jewellery firm. Acting on the tip-off, officers from the Headquarters Preventive Unit of Coimbatore Central GST Commissionerate conducted extensive searches at wholesale and retail jewellery stores in Pollachi and Coimbatore on February 1 and February 21.
Dual Software System Used to Evade GST
During the searches and inquiries with employees and partners of the jewellery firm, GST officials discovered that the business was operating two separate software systems—one for generating GST invoices and another for recording transactions conducted without GST compliance. This practice enabled the firm to conduct large unaccounted sales without paying taxes.
Stock Discrepancies and Massive Taxable Evasion
A thorough investigation into the wholesale suppliers of the firm revealed unaccounted transactions amounting to over 305 kg of gold. Additionally, a significant stock shortage was noted, with 31 kg of gold and 409 kg of silver missing. Based on these findings, the GST department confirmed that the firm had engaged in extensive unaccounted sales to evade tax.
Legal Action and Arrest of the Mastermind
Following the discovery, a case was registered against the jewellery firm for tax evasion totaling Rs 6.53 crore, with an underlying taxable value of Rs 217 crore. The mastermind behind the tax evasion, a partner of the firm, was arrested under the Central GST Act on Wednesday.
He was produced before the Chief Judicial Magistrate Court and has been remanded in judicial custody until March 10.
Stringent Actions Against GST Evasion
The GST department has reiterated its commitment to cracking down on tax evaders. Officials have warned businesses against engaging in illegal activities and emphasized strict enforcement of tax regulations to curb revenue losses to the government.
Read More: RaOne Tax Case: ITAT Quashes Reassessment Against Shah Rukh Khan
