Bengaluru, June 5 (IANS): The Karnataka commercial tax department found undeclared areca nut valued at Rs 11 crore from godowns raided at Shivamogga and Sagara in the state's Malnad region, an official said on Friday.

"Godowns and premises of areca merchants were raided at Shivamogga and Sagara on a tip-off that huge quantity of areca nut was purchased and stored by traders without documents during the Covid-19 induced lockdown in the state," the tax official said in a statement here.

The department collected Rs 1.10 crore as Goods and Services Tax (GST) with penalty from the merchants on the unspecified quantity of areca nut.

Shivamogga is about 300 km northwest of Bengaluru in the southern state.

South zone enforcement additional commissioner Nitesh Patil led the raiding team in 9 places at Shivamogga and 4 places at Sagara on Tuesday after keeping a close watch on the premises and movement of the goods.

"Inspection of books revealed unaccounted transactions and the suppressed turnover quantified so far was worth Rs 11 crore," said the statement.

Large quantity of areca nut is grown in Shivamogga, Chitradurga and Davanagere districts and sold to traders in northern states for use as an ingredient in paan (betel nut) and making ‘supari' or ‘ghutka'.

As the transactions were off the books, they will be shared with the APMC (Agricultural Produce Market Committee) yard in the district for action against the merchants.

"Preliminary investigation also showed some merchants obtained tax invoices from fictitious traders in Tamil Nadu to claim fake input tax credit," added the official.