Bhopal, Jul 9 (PTI) GST intelligence officers have arrested promoters of Bhopal-based SOM Distilleries for alleged tax evasion of nearly Rs eight crore in the supply and sale of alcohol-based hand sanitiser by the firm, officials said on Thursday.
Those arrested are Jagdish Arora, his brother Ajay Arora (both promoters of the firm) and Binay Kumar, who was working as a director, they said.
All the accused were produced before a court here that sent them to judicial custody till July 24, the officials said.
The firm did not respond to any calls or email.
"The total GST evasion detected till now is about Rs 7.97 crore," a statement issued on Thursday by the Directorate General of Goods and Services Tax Intelligence (DGGI) here said.
This evasion quantum is expected to increase considering that a large quantity of hand sanitizers is suspected to have been supplied in drums and tankers for which investigation is under progress, it said.
The investigations till now have revealed that the total retail price value of "clandestine removal" of hand sanitizers without payment of GST is about Rs 20.40 crore, the statement said.
In terms of volume, about 14 lakh (1.4 million) litres of hand sanitizers appears to have been supplied to various cities in India without payment of taxes, the probe agency said.
"The clandestine removals appear to have been resorted to considering the huge demand across India of alcohol-based hand sanitizers during COVID-19 lockdown period," it said.
A search was conducted by the DGGI officers of Bhopal zonal unit at the factory and office of SOM Distilleries Private Limited (SDPL) at Raisen Road area on June 26, the statement said.
"During the search operation, it was gathered that during the COVID-induced lockdown SDPL had also manufactured alcohol-based hand sanitizers which may have been removed clandestinely without payment of Goods and Service Tax (GST) at the rate of 18 per cent," it said.
"From the leads gathered at SDPL, factory and office of a unit, named Biscuit Basket Foods Private Limited (BBFPL), Sehatganj, Raisen Road engaged in manufacture of biscuits and trading of confectionary items, were searched on June 30, 2020," the statement said.
This biscuit factory is owned by a close relative of owners of SDPL, it said.
"This resulted in the seizure of unaccounted and non-GST paid sanitizers of brand name GENIUS manufactured by SDPL valued at Rs 13.23 crores (declared retail price) from the factory premises of BBFPL," the statement said.
From the documents retrieved during search and information collected, it was also gathered that sanitizer stock was supplied without issue of any invoices or payment of GST and was stored at SOM Distilleries and Breweries Limited (SDBL) at Rojrachak village in neighbouring Raisen, "which is a separate and distinct legal entity", it said.
Therefore, search was also conducted at SDBL factory premises, which resulted in seizure of unaccounted hand sanitizers worth Rs 5.92 crores (declared retail price), the DGGI said.
Subsequent to these detections, considering the scale of tax GST fraud, follow up searches were also conducted in the first week of July at New Delhi, Gurgaon, Sagar, Bhopal, Siliguri, Kolkata, Jodhpur and various other cities across the country, it said.
"These searches, which are continuing, have resulted in additional seizure of unaccounted stock and provided evidence of clandestine supplies," the statement said.
In view of thee serious offences committed, the three accused were arrested, the DGGI said.
Another modus operandi of possible GST evasion was detected during the searches.
"Wort (Malt), an intermediate product in the brewery process, is suspected to have been cleared from the brewery to distil clandestinely, without payment of GST," the DGGI said. Wort is the liquid extracted from the mashing process. Wort contains sugars that are fermented by the brewing yeast to produce alcohol.
"In view of the COVID-19 induced situation, all officials followed government directives on social distancing and wore gloves, masks and other protective equipment," the statement added. PTI AKV SKL AAR