Norms for issuing export licences should be tightened, the Central Board of Excise and Customs (CBEC) has told the Directorate-General of Foreign Trade (DGFT). The directive is believed to have come immediately after a probe by the Directorate of Revenue Intelligence (DRI) showed up inconsistencies in exports of textiles, gems and jewellery, to W Asian destinations.
The Revenue Department has estimated the loss due to such fraudulent operations at around 2 per cent of the total revenue. The DGFT has recommended a ban on all companies found to involved in fraudulent operations for atleast one year. In order to maintain an easy reference dossier for the Customs Department, the DGFT has also been asked to maintain clear information on directors and managemenet of all the companies and put in place an effective process to allow easy access to all details on the export-import companies that need to be verified. The ready reckoner on all export import companies is aimed at allowing the Customs Department to monitor closely, with minimum bureaucratic interference, all such companies.
The DRI report showed misuse of export- import regulations in transferring items to sister companies, so as to claim export promotion benefits, duty drawback benefits and duty concessions, an Exim India report said. Licence-holders, according to the DRI report, were found to be using the code for fraudulent transfers.
The DRI, though, is worried over more than just the loss of revenue. The fraudulent operations are considered to hav security implicaitons, since they are perceived as encouraging smuggling, wrong declaration fo information and open overestimation of export and import figures.
“CBEC wanted DGFT to make physical verifications of the place and conduct periodic reviews through random checking of samples. Regular data should be sourced from the Customs Department to monitor the pattern of foreign trade on the basis of items, amount/volume and destination. This would help in alerting the Customs Department in case of any divergence,” the Exim India news held.