Major Tax Evasion Busted in UP: DGGI Unearths Clandestine Tobacco Network Worth ₹185 Crore

The Lucknow Zonal Unit of the Directorate General of GST Intelligence (DGGI) has busted a massive clandestine manufacturing network of pan masala, scented jarda, and gutkha spanning across six premises in Chitrakoot and Banda districts of Uttar Pradesh.

Key Highlights of the Operation:

  • Staggering Seizures: Officers recovered 27 undeclared pouch-packing machines (including machines for jarda, pan masala, and gutkha), along with 15.5 lakh finished pouches and huge quantities of raw materials like areca nut and tobacco.

  • Massive Tax Evasion: The clandestine operations evaded applicable GST, HSNS Cess, and Central Excise duty totaling approximately ₹185 crore.

  • Arrest and Custody: The main proprietor managing the illegal manufacturing and clearings was arrested under the HSNS Cess Act, 2025 and Central Excise Act, 1944, and remanded to judicial custody.

  • Nationwide Crackdown: Following the implementation of the capacity-based taxation regime on February 1, 2026, DGGI formations nationwide have booked 27 similar cases, detecting a total duty evasion of ₹668 crore.

This decisive action underscores the government’s zero-tolerance policy toward tax evasion and financial malpractices.

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