- I Paid A Bribe
- 12 years ago
- 2088 views
Excise, Customs, VAT & FE Scandal
- Customs, Excise and Service Tax
- Customs Check and Clearance
- Paid INR 50,00,000
This is a long story.
Its starts with an exporter who is exporting by way of over-invoicing of sales product. The transaction goes like this. Buy or produce a product of Rs.100/-. Then invoice it for Rs.400/- in exports.
To make an export of Rs.400/- the exporter takes fake invoices of Rs.300/- to match the export price. Based on that the exporter claims:
1) Refund of excise (since he has a credit on purchase). It is 10% of sales price i.e. Rs.40/-. To give the claim/refund, the concerned officer take about Rs.4/- per pcs.
2) Refund of VAT (since exporter has a credit on purchase). It is about 4%-6% on sale i.e. Rs.20/- per unit. To give the claim/refund the concerned officers of sales tax take about Rs.3-Rs.4 per pcs.
With this exporter saves about Rs.52/- per pcs which he otherwise is not eligible to. But in the process, he has spent about Rs.15/- per pcs for raising a fake invoice. Net saving Rs.37/-.
After this the goods are sent for exports. At an export price of Rs.400/-, exporter gets incentives of Rs.36/-, For this the intermediate clearing agent charges Rs.4 per pcs (75% of this goes as a bribe to the custom clearing officers). Savings Rs.32/-. But to route the additional foreign exchange of Rs.300/- through the channels of hawala, the cost is Rs.12/- pcs,
In the total transaction, for a unit of Rs.100/-, the exporter gets incentives (net of expenses) for Rs.57/-.
Out of this, the exporter passes on Rs.37/- to Rs.47/- to the buyer. This is a huge loss to exchequer.
I can even pinpoint the people involved in this entire nexus, if required. It has been happening since the last 20 years and the exporters are still doing it. Can anybody do anything about it.