DRI busts Rs 2,500 crore areca nut duty fraud, nine arrested

The Directorate of Revenue Intelligence (DRI) has dismantled a network illegally importing areca nuts from Southeast Asia into India by declaring them as Bangladeshi to claim duty exemptions under the South Asian Free Trade Area (SAFTA), the Ministry of Finance said. The investigation has revealed a potential revenue loss of over Rs 2,500 crore to the exchequer. Nine people have been arrested.

Areca nuts from Bangladesh are fully exempt from the 100% basic customs duty under SAFTA, if rules of origin are met. Republicworld reports that syndicates imported nuts from Indonesia, Thailand, and Malaysia via Bangladesh, while The Hindu adds the masterminds routed goods through an Export Processing Zone in Bangladesh, changing containers and bags to obtain fraudulent SAFTA certificates.

The DRI seized about Rs 75 lakh in cash and 160 metric tonnes of areca nuts during searches at premises in Kolkata and Visakhapatnam. The Hindu reports that the investigation found the use of hawala channels and dummy entities. The licence of a customs broker firm that cleared most of the fraudulent imports has been suspended.