Tax-Free SEZs are New Havens to Stash Cash

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  • The directorate of revenue intelligence (DRI) has seized consignments of over 57,000 kg of red sanders and sandalwood being smuggled out of the country through a firm in the Noida SEZ.
  • One of the consignments, of 55,000 kg of red sanders, was being smuggled to the UAE with goods being declared as bath tubs.
  • The consignment was intercepted by DRI officials last month based on intelligence inputs.
  • Investigations revealed that the goods were being exported on shipping bills of a firm in the Noida SEZ.
  • Another consignment of 2,300 kgs of sandalwood was recovered from a container in Tughlaqabad inland container depot (ICD).
  • The total value of the consignments has been calculated to be Rs 30 crore even as the DRI has arrested four people from Delhi in connection with the case.
  • Sources said the agency had been investigating money laundering through export-import routes when it got intelligence about the consignments.
  • Because of relaxed laws, lack of strict customs oversight and rebate in tax and duties, SEZs are often used for money laundering i.e.sending black money abroad and bringing it back as white through fraudulent trade.
  • SEZs pay no tax. So all one has to do is to set up a SEZ and send money abroad against an invoice.
  • This can be manipulated in various ways which includes smuggling.