Surat GST Intelligence Uncovers Massive Rs 600 Crore Silver Trade Scam
In a significant crackdown on illicit financial activities, the Directorate General of GST Intelligence (DGGI) has unearthed a sprawling unaccounted trade of silver bullion and articles in Surat, Gujarat. The investigation revealed that over Rs 600 crore worth of silver was traded in cash over the past three years, leading to alleged GST evasion amounting to Rs 18 crore.
Small Shop, Massive Operation
Remarkably, this large-scale trade was conducted from a modest 200-square-foot shop located in Choksi Bazaar at Bhagal, within the densely populated walled city area of Surat. The shop, named Sumati Silver, outwardly displayed images suggesting it sold silver articles. Authorities suspect that the recent surge in gold and silver prices attracted numerous buyers who purchased these articles using cash, facilitating the clandestine operations.
Arrest and Judicial Custody
The DGGI arrested the bullion trader, Yatin Shah, on Monday following the investigation. Upon being produced in court, Shah was remanded to judicial custody. The arrest marks a critical step in addressing the tax evasion, but officials note that the broader chain of trade in jewellery created by these cash transactions remains under investigation.
Raid and Seizure of Incriminating Evidence
Acting on specific intelligence, the DGGI's Surat zone conducted searches at the business premises of Sumati Silver and the residence of its owner, Yatin Shah, in October 2025. During these raids, authorities seized a trove of incriminating documents, including parallel (kachha) challan books and related records. These documents provided concrete evidence of the clandestine supply of silver bullion and silver articles without the issuance of proper tax invoices.
Scrutiny Reveals Extent of Fraud
A thorough examination of the seized records uncovered that the firm allegedly made unaccounted taxable supplies valued at more than Rs 600 crore during the last three years. This massive scale of operations resulted in GST evasion of approximately Rs 18 crore. The investigation, which spanned over four months, faced challenges due to non-cooperation from individuals involved in the tax evasion racket.
Implications for the Jewellery Industry
The scrutiny further revealed that a substantial quantity of bullion was purchased by entities associated with top jewellers in Surat. This highlights a potential ripple effect within the local jewellery manufacturing and retail sectors. Precious metals like silver attract a 3% GST rate, and trading bullion in cash can create a sequence of tax evasion at multiple levels, from production to point-of-sale. Given the high value of silver, the financial impact of such evasion is significant, underscoring the need for stringent oversight.
Broader Context and Ongoing Investigations
This case emerges amid a rally in gold and silver prices, which may have incentivized such illicit activities. The DGGI continues to investigate the full extent of the trade network, focusing on how the cash transactions for bullion have influenced the jewellery supply chain. Authorities are determined to uncover all facets of this evasion to ensure compliance and fairness in the market.
Key Points of the Investigation:- Unaccounted silver trade worth Rs 600 crore uncovered in Surat.
- GST evasion estimated at Rs 18 crore over three years.
- Trader Yatin Shah arrested and sent to judicial custody.
- Operations conducted from a small shop in Choksi Bazaar.
- Incriminating documents seized during raids in October 2025.
- Investigation links purchases to top local jewellers.
- Ongoing probe into jewellery trade chain affected by cash transactions.
The crackdown by DGGI serves as a stark reminder of the vigilance required in monitoring high-value commodity trades to prevent tax fraud and maintain economic integrity.
