The Directorate Revenue of Intelligence (DRI) on Saturday arrested two people for allegedly evading tax over Rs 9 crore in a fake gold export racket.

According to the DRI, the arrested accused Vishal Choudhary is the director of a company that dealt in the export and import of gold. The other arrested accused, whose name is yet unknown, was a government-approved gold valuer who wrongly gave approval for Chaudhary’s fake gold to be exported.

Chaudhary is accused of misusing the advanced authorisation scheme (AAS) through which the government allows duty-free import on gold (without paying mandatory 10% custom duty) if the buyer makes jewellery out of the imported gold and exports it.

Since January, Chaudhary had imported 450 kilograms of tax-free gold bars from an African country. He, however, exported only 160 kilograms of gold jewellery of which 90% was found to be made from copper and nickel. He was thus able to evade paying tax over Rs 9 crore.

The DRI had raided and seized the consignment at the Ahmedabad Air Cargo on Saturday and discovered that the accused had painted the alloys in gold.

The accused exported the material to his own accomplices in Dubai and Hong Kong in order to show the trade on paper to government.

The accused then sold the imported gold in the market at premium rates.

According to the DRI, the government had introduced AAS in order to increase the country’s exports and help increase the flow of foreign exchange in the country.

First Published: May 27, 2019 02:01 IST