The party may be soon over for those who have been over or under invoicing goods under Customs.

Misrepresenting the actual transaction value of imports or exports will soon become punishable on par with terror funding under the Prevention of Money Laundering Act (PMLA).

The government is likely to carry out necessary amendments to the PMLA in this regard and a Cabinet note is likely to be circulated soon, sources told ET. Under-invoicing is usually done by importers to reduce the duty incidence. Over-invoicing, on the other hand, is carried out by exporters to corner export benefits. Under-invoicing is rampant in products where duties are still very high like edible oils.

The government runs a large number of export promotion schemes. Often, over-invoicing is done to obtain increased benefits under these schemes. Money laundering implies converting illegitimate money into legitimate money. Globally, money laundering activity is carried out by criminals associated with drugs or arms trafficking or terrorism.

These changes in the PMLA are being carried out to make India compliant with the Financial Action Task Force (FATF) on money laundering.