Pollachi Jeweller Arrested for Rs 6.53 Crore GST Tax Evasion

Pollachi Jeweller Arrested in ₹6.5 Cr GST Evasion: Dual Software System Used to Hide ₹217 Cr in Sales

In a significant enforcement action in Tamil Nadu’s Pollachi region, a partner of a retail jewellery firm has been arrested for allegedly evading Goods and Services Tax (GST) amounting to ₹6.53 crore. The arrest follows a detailed investigation by the Preventive Unit of the Central GST Commissionerate in Coimbatore, which unearthed large-scale underreporting of turnover through a dual-record system.

Intelligence-Led Action Triggers Raids

The case began with specific intelligence inputs pointing to undisclosed sales by a well-known jeweller operating in Pollachi. Acting on these leads, GST officials conducted coordinated searches on February 1 and again on February 21 at retail and wholesale premises in Pollachi and Coimbatore.

What started as a local inquiry soon expanded in scope, with investigators tracking transactions and inventory along the supply chain. The findings revealed a deliberate attempt to keep a substantial portion of business activity off the books.

Parallel Systems: One for GST, One for Real Sales

During the searches, officers discovered that the firm maintained two separate billing software systems. One system generated regular GST invoices, while the other was used exclusively to log unaccounted cash transactions. This parallel mechanism enabled the business to divert a portion of its gold and silver sales outside the tax net.

A detailed stock reconciliation showed a discrepancy of approximately 31 kilograms of gold and 409 kilograms of silver—items that had been sold without proper invoicing or GST reporting.

Over time, the firm had allegedly routed over 305 kg of gold through unreported channels, resulting in a concealed turnover of around ₹217 crore.

Arrest and Legal Action

Based on the findings, the GST authorities booked the firm and arrested the partner allegedly responsible for orchestrating the evasion. The arrest was made under provisions of the Central GST Act, and the individual was presented before the Chief Judicial Magistrate, who remanded him to judicial custody until March 10.

Broader Enforcement Implications

This case underscores how technology—when misused—can enable large-scale tax evasion, especially in sectors with high-value, cash-intensive transactions like jewellery retailing. The use of parallel digital systems to conceal revenue poses a significant challenge to tax compliance efforts.

It also highlights the critical role of unannounced audits, data-led investigations, and digital surveillance tools in exposing such schemes. Authorities have stressed that such enforcement actions are essential not only to protect government revenue but also to level the playing field for honest businesses.

As scrutiny continues to intensify in the jewellery sector, this arrest is likely to serve as a deterrent—reminding businesses that evading GST through technical manipulation carries serious legal consequences.