prasad1
Active member
An MP3 player for the price of a candy; an LED torch that costs less than a Mumbai local train ticket; an emergency lamp at little more than the price of a kilo of tomato; an LED bulb for as much as "cutting chai"! No it's not Christmas again but a peek at how Chinese goods are grossly undervalued by importers to evade customs duty.
The declared value of an MP3 player is Rs 1.83, but you are unlikely to get it for less than Rs 230 in the market. An LED torch and LED bulb, both valued at Rs 8, will set you back by anything between Rs 350 and Rs 450. An emergency lamp shown as worth Rs 25 goes for Rs 1,000. The retail price of a tablet with 4GB memory is declared as selling for Rs 400, but is being sold in the market for Rs 4,299.
In an investigation spanning six months, the Directorate of Revenue Intelligence has found that for over 3,673 items brought from China, the importers usually declared 1-9% of the actual value of the goods. Customs duty is about 31% of the value declared by the importers.
In one specific case, the duty evasion was around Rs 300 crore on imports worth over Rs 1,000 crore in the past four years by M/s Riddhi Siddhi Collection and M/s Aisha Electronics.
Faisal Javeri, proprietor of Aisha Electronics, claimed he was not even aware of the import procedures. He said he called up a Hong Kong-based supplier from a telephone booth and placed orders. DRI seized 66 containers of goods at the Jawaharlal Nehru Port.
But there is usually a web of connections behind such frauds. Investigations revealed that Javeri was a dummy importer controlled by Sunil Jain, proprietor of M/s Riddhi Siddhi Collection. DRI says the supplier — Hong Kong-based KS Group of Kishore Sohanda — was also a dummy. Saturn International, a company owned by Mitesh and Manoj Jain, the Hong Kong-based brothers of Sunil were the actual suppliers.
"Once the Jain brothers decided to capitalize on the huge demand for cheap Chinese goods, mainly in rural areas, Manoj and Mitesh established themselves in Hong Kong and started trading under the name of Saturn International. Sunil stayed in India to look after the import and sales. He roped in friend Javeri, whose uncle owns a chain of shops, and Sohanda as the director of a front they floated in Hong Kong," explained an investigator.
They routed the imports through several front firms to mask the transactions and also raise undervalued manipulated invoices that they could produce before customs to evade duty. The rest would have been taken care of with some greasing of palms.
DRI has issued show-cause to Jain brothers (Sunil, Manoj and Mitesh), Javeri, Sohanda and clearing agents, Balraj Kumar and P P Associates for recovering duty and imposing penalty.
"Their operations are typical of covert black money operations involving smuggling and tax evasion," the notices sent to the Jain brothers said.
Investigators said the MP3 players' retail price was declared at Rs 4, which they found ridiculous. "Strangely, for the MP3 players, the customs increased the value to just Rs 5 during clearance, which again raises questions about the process," an official said. "The clearing agent was paid Rs 45,000 in cash for every container over and above the official charges," he added.
Importers undervalue Chinese goods, make a killing - The Times of India
The declared value of an MP3 player is Rs 1.83, but you are unlikely to get it for less than Rs 230 in the market. An LED torch and LED bulb, both valued at Rs 8, will set you back by anything between Rs 350 and Rs 450. An emergency lamp shown as worth Rs 25 goes for Rs 1,000. The retail price of a tablet with 4GB memory is declared as selling for Rs 400, but is being sold in the market for Rs 4,299.
In an investigation spanning six months, the Directorate of Revenue Intelligence has found that for over 3,673 items brought from China, the importers usually declared 1-9% of the actual value of the goods. Customs duty is about 31% of the value declared by the importers.
In one specific case, the duty evasion was around Rs 300 crore on imports worth over Rs 1,000 crore in the past four years by M/s Riddhi Siddhi Collection and M/s Aisha Electronics.
Faisal Javeri, proprietor of Aisha Electronics, claimed he was not even aware of the import procedures. He said he called up a Hong Kong-based supplier from a telephone booth and placed orders. DRI seized 66 containers of goods at the Jawaharlal Nehru Port.
But there is usually a web of connections behind such frauds. Investigations revealed that Javeri was a dummy importer controlled by Sunil Jain, proprietor of M/s Riddhi Siddhi Collection. DRI says the supplier — Hong Kong-based KS Group of Kishore Sohanda — was also a dummy. Saturn International, a company owned by Mitesh and Manoj Jain, the Hong Kong-based brothers of Sunil were the actual suppliers.
"Once the Jain brothers decided to capitalize on the huge demand for cheap Chinese goods, mainly in rural areas, Manoj and Mitesh established themselves in Hong Kong and started trading under the name of Saturn International. Sunil stayed in India to look after the import and sales. He roped in friend Javeri, whose uncle owns a chain of shops, and Sohanda as the director of a front they floated in Hong Kong," explained an investigator.
They routed the imports through several front firms to mask the transactions and also raise undervalued manipulated invoices that they could produce before customs to evade duty. The rest would have been taken care of with some greasing of palms.
DRI has issued show-cause to Jain brothers (Sunil, Manoj and Mitesh), Javeri, Sohanda and clearing agents, Balraj Kumar and P P Associates for recovering duty and imposing penalty.
"Their operations are typical of covert black money operations involving smuggling and tax evasion," the notices sent to the Jain brothers said.
Investigators said the MP3 players' retail price was declared at Rs 4, which they found ridiculous. "Strangely, for the MP3 players, the customs increased the value to just Rs 5 during clearance, which again raises questions about the process," an official said. "The clearing agent was paid Rs 45,000 in cash for every container over and above the official charges," he added.
Importers undervalue Chinese goods, make a killing - The Times of India
