New Delhi, August 21, 2026 (Yes Punjab News)
The Directorate General of GST Intelligence (DGGI) has uncovered an alleged clandestine manufacturing network producing pan masala, scented jarda and gutkha across six premises in Uttar Pradesh’s Chitrakoot and Banda districts, with tax evasion estimated at around Rs 185 crore, the Ministry of Finance said on Friday.
Acting on specific intelligence, officers of the DGGI’s Lucknow Zonal Unit conducted coordinated searches around midnight on August 18 at premises associated with two firms — one involved in manufacturing pan masala and allied products and another engaged in trading.
Officials found 27 undeclared pouch-packing machines, comprising six machines for scented jarda, nine for pan masala and 12 for dohara/desi gutkha. Equipment used for mixing, crushing areca nut and drying was also recovered.
The searches resulted in the seizure of 1,550,922 pouches of finished products, including pan masala, chewing tobacco, scented jarda and sugandhit supari.
The seized raw and packaging materials included 32.9 metric tonnes of areca nut and cut areca nut, 2.8 metric tonnes of tobacco, 8.4 metric tonnes of packaging material, pouches and laminates, 470 kg of katha powder, 850 kg of glycerine, 545 kg of essence and 256 kg of unpacked pan masala.
According to the Finance Ministry, preliminary investigation indicates that the operation was allegedly being conducted through a network of unregistered premises using undeclared machinery. The manufactured products were allegedly cleared without payment of applicable GST, Health Security and National Security (HSNS) Cess and Central Excise duty.
The tax authorities have detected evasion of GST, HSNS Cess and Central Excise duty amounting to approximately Rs 185 crore so far.
The proprietor of the manufacturing firm was prima facie found to have organised and managed the alleged clandestine manufacturing and clearance operations. He was arrested on August 19 under provisions of the HSNS Cess Act, 2025, and the Central Excise Act, 1944.
He was subsequently produced before the Special Chief Judicial Magistrate (Customs), Lucknow, who remanded him to judicial custody.
The DGGI said the investigation remains underway and further recoveries are expected.
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