The DRI has also found that Shah has transferred Rs 36 crore (the difference between the actual price of the supplements and the declared value) to his brother in US through two hawala operators this year.The Directorate of Revenue Intelligence (DRI) on Wednesday arrested one of the largest importers of protein supplements in India for evading customs duty of about Rs 14 crore by undervaluing the imports using fake invoices.
The DRI investigation has found that Hardik Shah, owner of Pearl International and Redasoft LLP, used to import Whey protein and health supplements of foreign brands such as BPI Sports, Dymatise Nutrition and GAT from suppliers in the US and at the time of customs clearance in India used to produce “fabricated” undervalued invoices of a US firm, Edge Distributors LLC, run by his own brother.
The DRI has also found that Shah has transferred Rs 36 crore (the difference between the actual price of the supplements and the declared value) to his brother in US through two hawala operators this year.
“The recent investigation has brought to light that the respondent (Shah) has used hawala channels to transfer huge amount of money to US through Dubai… It is also revealed that he has been using the illegal fake invoicing route of GST (Goods and Services Tax) for generating cash,” said the remand application of DRI filed in a local court in Mumbai. The agency has alleged that Shah has generated Rs 1 crore this calendar year through fake invoicing route.
According to the remand application, Shah has admitted that he has been taking “bogus purchase of invoices” from accountants to “reduce his profits” and eventually “reduce his income tax” of outgo.
The DRI investigation into the case began in January, when it searched the firms of Shah and recovered several incriminating documents. However, to evade DRI’s scrutiny Shah continued to evade customs duty by importing the health supplements in the name of a front company. The undervalued invoices too were given by a different US firm run by his brother.
The DRI found that Shah has imported at least 100 consignments this year and undervalued it to evade customs duty.
A local court in Mumbai on Thursday remanded Shah to 14-day judicial custody.