The inferior quality and inedible betel nuts being smuggled into the country from Nepal and north-eastern states are not only taking a toll on people’s health but also ruining the revenue targets of the government. The traders smuggle large quantities of betel nuts used for ‘pan masala’ and ‘gutkha’ manufacturing every year, bypassing the excise duties, trade and entry taxes, whereby the revenue department is estimated to incur a loss of over Rs 3,000 crore every year.
Kanpur alone accounts for a revenue shortfall of Rs 900 crore owing to large consumption of such betel nuts in over 40 pan masala and gutkha production units operational here. According to an official of the Department of Revenue Intelligence (DRI), the volume of trade in gutkha industry should fetch around Rs 3,500 crore as revenue but the recovery has failed to move beyond Rs 800 crore. The department had recently seized large quantities of betel nuts being illegally smuggled into the country from the Nepal border. A large number of smaller gutkha manufacturers spread across the city procure this smuggled supari from the network and sell the manufactured products in the market, without considering the ill-effects of low quality inputs. Due to the illicit nature of procurement, the finished products and the raw material purchases for this processing are not shown on the company records, thereby hitting the revenue targets of the government.
DRI had recently issued guidelines for the manufacturers to show their monthly statements of raw material purchase and figures for gutkha production but the effect seems to be trifling.
According to industry players, Rs 200,000 worth betel nuts produce around Rs 2 crore worth of gutkha.
So, an estimated 100 tonnes of betel nuts (worth Rs 40 lakh) being traded into the city everyday produces gutkha worth over Rs 4 crore everyday while this production is never on the record.