DRI arrests Kolkata trader for Rs 40 crore IGST fraud

KOLKATA: The Directorate of Revenue Intelligence on Thursday arrested a Kolkata-based businessman in connection with an alleged Rs 40 crore GST refund fraud in which the accused had mopped up money showing fraudulent exports of tobacco to Thailand.
The man, the central investigating agency found, has been supplying inferior quality tobacco rejects to Dubai and Singapore as well.
According to DRI sources, the businessman had been exporting chewing tobacco to Thailand for several years. Through the two firms he owns, the accused has exported around 23 consignments of chewing tobacco at prices inflated around 75 times to buyers in Singapore and Dubai over the past one and a half years.
He created a chain of fictitious purchases of raw materials from traders in Kolkata, New Delhi and Ranchi. He created documents in support of fraudulent exports and managed to get undue refunds of IGST and cess. The agency estimates that the man has mopped up nearly Rs 28 crore through such transactions. He was also involved in money laundering, the investigators believe.
During a search at his premises on Thursday, the officials intercepted three consignments of 9,000 kg of tobacco rejects and floor sweepings. While the businessman declared their value to be around Rs 2.5 crore, it was much less actually. During investigation it was found that inferior quality of tobacco rejects were exported to Singapore. He was arrested under Section 135 of the Customs Act, 1962.