Chhattisgarh: GST Department Uncovers Tax Evasion Worth Crores in Gutkha Factory
The GST department in Chhattisgarh has discovered an illegal manufacture of Gutkha under the brand name “Sitar”. The manufacturer was running this production without getting a GST registration for the past four years, resulting in crores of tax evasion. The GST officers arrested the manufacturer, Gurumukh Jumnani, in Durg district on September 23 under section 69 of the GST Act.
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This comes after Durg and Rajnandgaon were being investigated on June 25 and 27, 2025. During the investigation, it was found that the manufacturer, Jumnani, had been producing Gutkha illegally since 2021. Although he was summoned before the authorities, he never appeared for 2 months.
The investigation found that the accused manufacturer kept on changing the place of their manufacturing units so that they could not be caught. The production took place in Manki village, Rajnandgaon and Thelkadih, Khairagarh, from April 2021 to September 2022. Then, between January and June 2023, the units were shifted to Mandir Hasaud and Bhanpuri in Raipur. From July 2023 to June 2025, the units were moved to the Bairdeeh, Joratari, and Ganiyari areas of Durg.
This investigation has also found how the labourers were being exploited. Several young labourers from Madhya Pradesh were kept as bonded labour. They were not even allowed to leave the place and were made to work through the night.
The products were packaged with different brand names, hidden in warehouses and later sold into the market. The accused was running a warehouse named “Komal Food” under his son’s name, Sagar Jumnani, in Durg.
As per the GST officers, the areca nut was taxed at 5% GST, but it was actually being converted into Gutkha, which is taxed at 28% GST along with up to 204% cess.
The scam has resulted in a massive revenue loss to the government. An earlier raid in Durg and Rajnandgaon had forced the businessman to pay Rs 50 lakh in unpaid taxes. The Food and Drug Administration also seized areca nuts worth Rs 1.5 crore.
In the current case, it is being estimated that the factory was manufacturing gutkha of around Rs 25 lakh per day. The investigation is still ongoing, and the actual tax evasion is yet to be calculated.
