Karimnagar’s granite industry is facing an alleged ₹23 crore GST evasion case after Directorate General of GST Intelligence (DGGI), Hyderabad, found discrepancies in granite volumes, specific gravity declarations and statutory records during inspections at six quarries and their associated processing units.
The inspections covered Sri Venkatesh Granites Pvt Ltd, PSR Granites, Sri Vishnu Granites, Shri Nidhi Granites, Sandhya International Granites and Sri Sai Balaji Multi Colour Rocks. DGGI officials cross-checked shipping bills, L-forms, stock registers and other statutory declarations maintained by quarry operators and exporters.
According to the investigation reported by the Times of India, several granite exporters declared specific gravity values as high as 4.7. Officials compared those declarations with an average range of 2.65 to 3.2 cited in the report. Specific gravity is relevant because it is used to calculate the weight and volume of granite, which in turn affects mining-related payments and the associated GST liability.
The alleged tax shortfall relates to the reverse charge mechanism, under which the tax liability can fall on the recipient of specified goods or services rather than the supplier. DGGI officials suspect that inflated specific gravity declarations resulted in lower declared granite volumes and consequently reduced GST payments.
The investigation also identified mismatches between closing stock recorded by quarry operators and quantities reflected in statutory documents. Officials extended the scrutiny to associated factories, comparing production and export-related records with stock declarations and the granite volumes reported by the businesses.
The case highlights the administrative link between mineral measurement, state mining revenues and GST collection. In a quarrying sector where physical extraction, processing, transport and exports generate multiple records, differences between on-site stock and statutory declarations can affect more than one layer of public revenue assessment.
DGGI estimated the alleged tax shortfall across the Karimnagar granite industry at ₹23 crore. The findings remain allegations arising from an ongoing investigation, and the supplied report does not state whether final adjudication, recovery proceedings or penalties have been completed.
Similar allegations involving measurement and record discrepancies had surfaced earlier, according to the report, with GST authorities and state vigilance and enforcement officials previously examining comparable methods allegedly used by some Karimnagar-based granite companies. The latest inspections bring six named quarry operators and their associated processing units within the current investigation.
The next steps will depend on the formal proceedings arising from the DGGI findings, including determination of liability and any recovery or penalty action under applicable GST and mining-related provisions.
