The Kerala Goods and Services Tax Department Thursday claimed to have seized 108 kg of unaccounted gold from Thrissur following searches over some alleged irregularities in transactions.

The operation, named Torre del Oro after the gold tower in Spain, was the largest search for tax evasion conducted by the state GST department. Searches began Wednesday and went on till noon Thursday.

Thrissur is considered to be the hub of gold jewelry manufacturing in Kerala, with many prominent jewellers having their roots here.

According to GST Special Commissioner Abraham Renn S, officials were looking into the last five years of unaccounted transactions done by gold manufacturers here. “It was during the search that we seized the unaccounted gold. We have found evidence for massive unaccounted transactions which are being probed further. The search covered 78 premises of 38 institutions,” he said.

On the modus operandi of the alleged illegal business, the commissioner, who led the search operations, said: “Jewelry manufactures will mobilize gold from various sources. After making ornaments, these manufacturers will sell the products to showrooms, which will again sell the ornaments to the customers without any invoice. Our search included several major manufacturers in Thrissur. While the search was held at the premises of the manufacturers, the role of the merchants would be looked into further investigation”.

On the source of the alleged unaccounted gold, the commissioner said smuggling cannot be ruled out.

Jewelry Manufacturers Association (Kerala) general secretary AK Sabu said the organization had always advocated for “accounted transactions” with GST bills.

“We are not against the searches. We had conducted an enlightening campaign among the manufacturers.  Manufacturers in Thrissur have business across the state, selling gold ornaments to around 7,200 shops. Many showrooms are not ready to give GST bills to manufacturers of ornaments. They (showrooms) will discourage the GST bills saying they have manufacturers who do not insist on GST bills. Hence, others are also forced to do the business without any documents. There are small-scale manufacturers, who make gold ornaments in their houses and sell to a wholesale dealer. Such small-scale entrepreneurs are not within the GST system,’’ he said. Sabu said most manufacturers depend upon old gold ornaments and bullion. “We are not dealing with smuggled gold,” he said.