Major Action by GST Department: Multi-Crore Tax Evasion Exposed

Raipur, 24 September

The State Tax (GST) Department has uncovered a major scam in the gutkha (chewing tobacco) business, leading to the arrest of Gurumukh Jumnani, manufacturer of the Sitar brand gutkha. Departmental investigations revealed that Jumnani had been manufacturing gutkha without GST registration for the past four years, evading taxes worth crores of rupees.

The scam came to light during investigations conducted by the GST department in Durg and Rajnandgaon districts on 25 and 27 June 2025. The probe revealed that illegal production of Sitar Gutkha had been ongoing since 2021. Despite being summoned, Jumnani failed to appear before the department for two months.

Investigations revealed that:

From April 2021 to September 2022, factories were operated in Manki village (Rajnandgaon) and Thelkadih (Khairagarh).

From January 2023 to June 2023, operations shifted to Mandi Hasaud and Bhanpuri (Raipur).

From July 2023 to June 2025, factories were run in Bairdeeh, Joratari, and Ganiyari (Durg district).

To avoid administrative raids, the business would change factory locations every month, and the products were sold in the market under false names and stored secretly in various warehouses.

The probe also uncovered that Jumnani operated a betel nut warehouse under the name Komal Foods, registered in his son Sagar Jumnani’s name in Durg district. Betel nut was shown as the only product on paper, but in reality, it was being processed into gutkha and sold. Notably:

Betel nut is taxed at 5% under GST

Gutkha is taxed at 28% plus up to 204% cess

This manipulation led to a massive loss in government revenue.

Earlier in March 2024, the department had conducted raids in Durg and Rajnandgaon and recovered ₹50 lakh in taxes, while the Food and Drug Administration had seized betel nuts worth ₹1.5 crore.

Investigations also exposed severe labor law violations. Workers, mostly young men from Madhya Pradesh, were kept as bonded labor in the factories. They worked overnight shifts, were not allowed to leave, and were replaced every three months. Statements from local residents and employees confirmed that Gurumukh Jumnani himself was directly overseeing factory operations.

On 23 September 2025, Jumnani was arrested under Section 69 of the GST Act. According to the department’s report, the accused was producing and selling gutkha worth approximately ₹25 lakh daily. The department is currently calculating the total amount of tax evaded over the past four years. Officials stated that a comprehensive investigation is underway and strict action will be taken against the accused.

The state government has reiterated its zero-tolerance policy towards tax evasion, illegal business practices, and threats to public health. It has clearly stated that any business or entity that breaks the law, evades taxes, or endangers public health will face severe legal consequences. These will include not only tax recovery but also arrests and penalties under punitive provisions.

The government emphasized that no leniency will be shown towards those who damage the state’s economy or endanger citizens’ interests.