THOOTHUKUDI: Citing the recent Rs 38-crore tax demand raised against six jaggery traders for selling sugar-blended palm jaggery as traditional Panankarupatti to evade GST, palm activists have renewed their demand for a crackdown on the manufacture and sale of adulterated palm jaggery, saying it tarnishes the reputation of the GI-tagged Udangudi product.
The Commercial Taxes and Registration Department recently imposed a penalty of over Rs 38 crore on six traders after finding that they had been manufacturing sugar-blended jaggery and marketing it as Panankarupatti (pathaneer-made palm jaggery) since 2019 while paying lower GST.
Panankarupatti is prepared by boiling pathaneer (palm sap) collected from the inflorescence of palmyra trees during summer. Considered a traditional food with medicinal value, it is produced without the addition of sugar.
According to officials, loose sales of genuine palm jaggery are exempted from GST, while packed palm jaggery attracts 5% GST. However, sugar-blended jaggery falls under a different tariff category and attracts 18% GST.
The tax evasion came to light after the officials from Chennai tracked returns of jaggery traders in Udangudi, a major palm jaggery production hub, that reported annual turnovers exceeding Rs 5 crore.
During inspections, officials allegedly found large quantities of white sugar stored in palm jaggery production units. Verification of purchase records revealed bulk procurement of sugar, following which the traders were summoned for inquiry.
According to officials, the traders admitted in written statements that sugar had been blended during the manufacturing process of commercial-grade jaggery, which was later sold under the label of Panankarupatti.
A senior official from the department said the traders had paid either 5% GST on packaged goods or no GST on bulk sales, despite the product attracting 18% GST, resulting in revenue loss to the government.
Demand notices have since been issued by the Joint Commissioner of the Tirunelveli Division, and revenue recovery proceedings were initiated against the six traders three weeks ago.
Welcoming the action, V Gunaselan, a social activist, urged the district administration to widen its crackdown, alleging that more than 100 traders continue to manufacture sugar-blended jaggery and sell it as palm jaggery.
Sathankulam Thenpaguthi Farmers Association president A Lourdmani said many consumers unknowingly purchase adulterated products believing them to be genuine palm jaggery. “The 18% GST classification itself indicates that sugar-blended jaggery is different from original pathaneer-made palm jaggery,” he said.
