| The government has unearthed more than 1,300 cases of tax frauds by exporters that has cost the exchequer a huge Rs 3,500 crore in the last three years.
Various government agencies such as the Directorate of Revenue Intelligence have issued a total of 1,311 show-cause notices to traders misusing export promotion schemes to avoid taxes or get refunds during 2003-04, 2004-05 and 2005-06.
These cases entailed a total duty evasion of about Rs 3,580 crore, official sources said, adding that the government has managed to recover a substantial part of it.
Of these, government agencies have managed to solve 792 cases with a total duty of Rs 1,192 crore, they said, adding that another Rs 829 crore has been collected as fine and penalty.
The remaining cases are under various stages of adjudication, the sources said.
With such a high number of tax evasion cases among the trader community, the government has either already tightened or initiated the process of strengthening the export promotion schemes such as Export Promotion Capital Goods.
The government had tightened the EPCG scheme earlier this year after DRI seized a number of luxury cars from various business houses, who had imported the high-cost vehicles without paying the requisite customs duty.
Sources said other programmes such as Advance Licensing (Authorisation) scheme, Duty Entitlement PassBook scheme, Duty Drawback and Duty-Free Replenishment Certificate schemes have also been reviewed to prevent such misuse.
Besides, the Directorate General of Foreign Trade has also been monitoring these schemes, the sources said, adding that checks and balances have been put into place to prevent tax evasion.
Sources said while export consignments for examination are subjected to parameter-based selection, goods exported to sensitive destinations and risk-prone products and commodities are subjcted to strict scrutiny.
Further, efforts are also being made to arrest the defaulting exporters and their bank accounts are frozen, they said, adding that various intelligence agencies hold regular meetings to exchange information in this regard.
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