In a major crackdown on jewellers and traders evading taxes, a team of officials from the Good and Services Tax and Central Excise departments conducted raids on several ‘angadia’ operators in Mumbai.
Angadias are informal courier and bank services used by diamond and jewellery traders for tax evasion. They act in utmost secrecy as a conduit for transferring diamonds, gems, jewellery and cash, mainly between traders and jewellers.
GST officials expect tax evasion worth over Rs 300 crore through the angadia route. The department has booked more than 200 angadia operators from Mumbai Central railway station.
These raids assume more significance as the states suffered a shortfall in GST revenues.
The GST department had received a tip-off from various agencies that angadias became active after demonetisation. A source in the department confirmed the action against angadia operators. “We have got information from investigative agencies that angadias have become active. Some diamond traders and jewellers have been using this route to avoid paying taxes. By Friday, we will be able to tell the quantum of evasion and the total amount of goods we have taken in our custody,” he told Moneycontrol.
Mumbai diamond traders send raw diamonds to Surat which are brought back to Mumbai after polishing and finishing. Angadia businesses run on mutual trust and thus the government is not able to track the amount which they have to pay in taxes. The angadias operate as banks and courier services simultaneously.
After demonetisation, government and investigative agencies were under the impression that angadias will be out of business. The angadia hub in Zhaveri Bazaar — Asia’s largest bullion market — was shut for almost a month, but resumed operations after a month. Their main markets are Mumbai, Jaipur, Kolkata and Surat. In Mumbai alone, there are more than 500 anagadia operators.
This is the third instance when angadias were raided by investigative agencies. Earlier in 2008 and 2013, Income Tax department and National Investigation Agency officials conducted raids on their premises.