Maharashtra Sales Tax department claimed to have unearthed a major hawala racket having a turnover of Rs 6,500 crore after raiding 37 firms in the city.

"During our investigations, we found that transactions worth around Rs 6,500 crore were carried out by 37 companies since 2007. Almost all the firms had bank accounts with a leading private bank," a sales tax official said today.

"We conducted raids at 12 places including Grant Road , Charni Road, Kalbadevi , Opera House and Virar from where the companies were operating," the official said.

The firms, raided yesterday, were allegedly involved in the trade of ferrous metals and diamonds, he said.

According to the official, of the total transactions of Rs 6,500 crore with the bank, the sales tax related credits were around Rs 12-15 crore, of which actual evasion was to the tune of Rs 1.5 crore.

"Since the amount was of this huge magnitude, we have informed other concerned authorities including the Income Tax, Customs and Enforcement Directorate to look into the matter. These authorities have also started investigations into the case," the official said.

The police, meanwhile, arrested a city-based businessman Naresh Shah (35) for his alleged involvement in the racket.

He was today produced in the court and remanded in police custody till July 13. (PTI)