The Visakhapatnam Central GST Commissionerate has detected alleged duty evasion of ₹54.60 crore linked to a clandestine pan masala manufacturing operation in the Pedagantyada area of Gajuwaka.

According to the department, a search of the registered premises found manufacturing activity that had not been recorded in the statutory records. Officials also found three undeclared pouch-packing machines installed and operational at the site. 

The officials said the applicable capacity-based Health Security-cum-National Security (HSNS) Cess regime for pan masala came into effect on February 1, 2026. The cess is calculated based on factors including the production capacity, number of packing machines and pouch weight. 

The proprietor was prima facie found to be involved in the unauthorised manufacture and clearance of pan masala products. He was arrested on September 25, 2026, under Section 26 of the HSNS Cess Act, 2025, and was subsequently produced before the Special Judge for Economic Offences-cum-IV Additional Metropolitan Sessions Judge in Visakhapatnam. The court remanded him to judicial custody. 

 

Officials said the investigation is continuing to establish the full extent of the operations and identify any other persons or links involved.