DRI busts network involved in Rs 2,500-cr customs duty fraud in areca nut imports

DRI officers have dismantled a network involved in importing South-East Asian areca nuts into India by falsely declaring them as Bangladeshi origin and fraudulently availing concessional duty benefits under the South Asian Free Trade Area (SAFTA).

The finance ministry, in a statement, said an investigation by the Directorate of Revenue Intelligence (DRI) has so far revealed a potential revenue loss of more than Rs 2,500 crore through illegal imports of areca nuts. Nine persons have been arrested in connection with the case.

The import of areca nuts into India attracts a Basic Customs Duty (BCD) of 100 per cent.  However, eligible imports of areca nuts made under the SAFTA agreement are fully exempt from customs duty. The areca nuts originating from Bangladesh are entitled to exemption under SAFTA if imports meet the prescribed Rules of Origin criterion.

Intelligence gathered and developed by DRI indicated that certain syndicates were fraudulently claiming SAFTA benefits on a very large scale on imports of areca nuts.