Mumbai Trade Watch: DRI Books 542 Import Fraud Cases In FY25, Duty Evasion Tops ₹2,606 Crore

Mumbai, Dec 30: The Directorate of Revenue Intelligence (DRI), in 2024–25, booked 542 cases of import fraud involving duty evasion exceeding Rs 2,606 crore across various typologies such as misdeclaration, misclassification, undervaluation, misuse of end-use notifications, evasion of anti-dumping duties (ADD) and countervailing duties (CVD), and Free Trade Agreement (FTA)-related frauds.

High Duties And Trade Volumes Drive Import Fraud

“Evasion of duties and taxes, circumvention of the Foreign Trade Policy (FTP) and other regulatory requirements, and illicit financial flows through trade channels are the key drivers of commercial customs fraud in India. High duties and taxes on imported goods, combined with the profitability of commodities like gold, electronics and luxury items, drive misdeclaration, under-invoicing, misclassification and smuggling. Globalisation, rising trade volumes, a surge in e-commerce shipments and growing demand for restricted and prohibited goods, coupled with the misuse of modern technologies and sophisticated concealment methods, are further fuelling commercial fraud,” the DRI stated in its report.

Undervaluation Remains A Persistent Challenge

“Undervaluation of imported goods remains a persistent challenge. It occurs through various means, including the submission of falsified valuation documents, fake or manipulated invoices, and remittance of differential payments through unauthorised channels, non-inclusion of allied cost components in assessable value, and non-disclosure of related party transactions. Anti-dumping duty is imposed on imports sold below fair value to protect domestic industries from unfair trade practices. However, evasion occurs through misdeclaration, misclassification, overvaluation, false origin claims, or routing via third countries under FTAs. Such practices not only harm domestic manufacturers but also cause significant revenue losses to the government,” the report stated.

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Misdeclaration Used To Circumvent Policy Restrictions

“Some unscrupulous importers resort to misdeclaration in terms of description of imported goods, quantity, quality, specification, country of origin, end-use, etc., to evade import duties and circumvent policy restrictions or prohibitions,” the report further stated.

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