Income Tax Dept detects under-invoicing of imports

The Income Tax Department on Saturday said that it has unearthed a case of under-invoicing cases of imports — importers show lesser import value in their bill and pay less duty but the actual value is much higher, thus causing a loss to exchequer.

The Department noted that though the importer has declared import value of ₹20 crore over the last three years, actual import values could be as high as ₹2,000 crore.

“The Income Tax Department carried out search and seizure operations on an importer and trader of laptops, mobile phones and peripheral parts. The search operations commenced on October 10, and were spread across the National Capital Region, Haryana and West Bengal,” a statement issued by the Central Board of Direct Taxes (CBDT) said. CBDT is the apex policy making body for the Income Tax.

Large-scale operation

Further it said that during the course of the search, several incriminating documents, diaries and digital evidences have been found which reveal that the group is entrenched in large-scale under-invoicing and wrongful declaration of goods imported by it. A large amount of evidence indicating unrecorded transactions, unaccounted investment in properties, bogus loans taken etc have also been gathered.

“The modus operandi involves import of goods in the name of shell entities at under-valued and/or wrongful declaration of description of goods imported, with an intent to evade customs duty. Upon clearance at port(s), such goods have been found to be distributed throughout India by way of out-of-books cash transactions,” the statement said.

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This aspect has been fortified while searching one of the containers at Kolkata Port, where the bill of lading declared the goods as ‘HDMI cables’ valued at ₹3.8 lakh. However, on de-sealing and searching the same, it was revealed that the actual goods imported are high value items like laptops and mobile phones valued at ₹64 crore.

“The evidences found and seized during the course of the search reveal that the payments for such under-invoiced goods to foreign consigners have been made through hawala channels. Almost the entire business has been found to be run through such modus-operandi,” the statement mentioned.

The wealth generated has been used for the acquisition of high value immovable properties, disguising of cash introduced in the form of bogus rental income and bogus unsecured loans, and deposits in foreign bank accounts. During the course of the search, unaccounted cash of ₹2.75 crore has been seized. Further investigations are in progress, the statement said.