The Directorate of Revenue Intelligence in Mumbai has uncovered a ₹114.74 crore export fraud involving overvaluation of garments and misuse of government incentive schemes. Two individuals, including an exporter and a private Customs broker, have been arrested as part of the investigation.
According to officials, the accused purchased low-quality garments from local markets without invoices and exported them to African nations at prices nearly six times higher than their actual value. By inflating invoices, the syndicate claimed excess benefits under schemes such as duty drawbacks and the Rebate of State and Central Taxes and Levies (RoSCTL). Early findings show fraudulent claims of around ₹18.74 crore in duty drawback and nearly ₹96 crore through RoSCTL rebates.
Investigators revealed that the group created at least 14 fake Importer Exporter Codes in the names of fictitious individuals to mask their activities. Using these codes, they booked consignments from the Inland Container Depot at Talegaon, Pune.
Acting on intelligence inputs, DRI officials intercepted two consignments earlier this week. Searches across eight locations in Mumbai uncovered fake invoices, incriminating documents, and digital evidence that confirmed systematic misuse of export-linked schemes.
Authorities said the Customs broker helped facilitate the fraudulent transactions for commission payments, while the exporter is believed to have masterminded the operation. Both are now in custody as the investigation continues.
Officials added that the fraud highlights how easily export incentive frameworks can be manipulated when proper checks are missing. The schemes were designed to boost India’s trade competitiveness by refunding embedded taxes on genuine exports, but fraudulent practices like overvaluation and use of fictitious firms undermine the purpose and cause heavy losses to the exchequer.
The DRI has confirmed that more arrests are likely as investigators trace the wider network involved in the scam. For now, the crackdown demonstrates both the growing sophistication of export-related frauds and the regulatory challenges in striking a balance between trade promotion and strict enforcement.
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