Pan masala manufacturing machine seized in Hyderabad
Hyderabad: The Hyderabad Central Goods and Services Tax (CGST) zone has busted pan masala manufacturing units in Medchal-Malkajgiri district for evading taxes worth Rs 160 crore.
Based on intelligence inputs, the CGST raided the units on August 20 and found 40 undeclared FFS (Form-Fill-Seal) pouch-packing machines used to manufacture and pack pan masala and tobacco products, including scented ‘zarda’.
At least 56 workers were found engaged in manufacturing and packing activities during the raid. Following the raid, 5,500 kg of finished pan masala and tobacco pouches, along with ready-to-dispatch consignments valued at Rs 76 lakh, were seized.
The seized material also included about 2,015 kg of pan masala mixture and 810 kg of tobacco, besides packing material and other incriminating documents. Officials also seized two vehicles used for transportation.
According to the Hyderabad CGST Zone, the unit was operating clandestinely without registration and clearing finished products without paying applicable GST, Health Security and National Security (HSNS) Cess and Central Excise duty.
The accused, who was allegedly organising the manufacture and clearance of the products, was arrested on August 21. He was produced before the Special Judge for Economic Offences, Hyderabad, who remanded him to judicial custody for 14 days.
A capacity-based cess and taxation regime for the pan masala and tobacco sector has been in force since February 1, 2026. Under the Health Security and National Security (HSNS) Cess Act, 2025, a capacity-based monthly cess is applicable to pan masala based on the number, type and capacity of packing machines installed.
A similar capacity-based central excise levy is applicable to chewing tobacco, zarda and gutkha under the Central Excise Act, 1944.
This post was last modified on August 22, 2026 2:38 pm