DRI uncovers Rs 2,500 crore duty evasion

The Directorate of Revenue Intelligence (DRI) has uncovered a large-scale duty evasion racket involving areca nuts imported into India from South-East Asian countries. According to the Ministry of Finance, the scheme could have led to a loss of over Rs 2,500 crore in customs revenue. A recent intelligence-led operation resulted in the arrest of nine individuals, seizure of approximately Rs 75 lakh in cash, and removal of around 160 metric tonnes of areca nuts.

The Customs Broker licence of a firm responsible for clearing most of the fraudulent consignments has also been suspended. The DRI found that syndicates were exploiting duty exemptions available under the South Asian Free Trade Area (SAFTA) agreement. Areca nuts were allegedly sourced from Indonesia, Thailand, Malaysia and other countries, then falsely declared as originating from Bangladesh to take advantage of full customs duty exemptions.

Investigations uncovered fraudulent SAFTA Certificates of Origin and revealed the use of hawala channels and dummy entities to launder the proceeds. The fraudulent imports have caused significant revenue loss to the government and negatively impacted domestic areca nut growers and legitimate businesses. The Ministry of Finance stated that the investigation is ongoing as the scheme has been running for several years.