DRI Uncovers Rs 2,500 Crore Customs Duty Fraud in Areca Nut Imports, 9 Arrested

New Delhi: The Directorate of Revenue Intelligence (DRI), in a month-long intelligence-led operation, has dismantled a major 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 Ministry of Finance said in a statement.

The investigation has so far revealed a potential revenue loss of more than Rs 2,500 crore to the exchequer, while nine persons have been arrested in connection with the case.

According to the Ministry, syndicates were importing areca nuts into India from Indonesia, Thailand, Malaysia and other Southeast Asian countries and falsely declaring Bangladesh as the country of origin to fraudulently avail concessional duty benefits under SAFTA.

The DRI dismantled the network following a month-long intelligence-led operation.

Areca nut imports into India attract a Basic Customs Duty (BCD) of 100 per cent. However, eligible areca nuts originating from Bangladesh are fully exempt from customs duty under SAFTA, provided the imports meet the prescribed Rules of Origin criteria.

According to the Ministry, the syndicates falsely declared the areca nuts as originating from Bangladesh to fraudulently avail duty benefits under SAFTA, with the investigation so far revealing a potential revenue loss of more than Rs 2,500 crore."

As part of the operation, authorities have seized approximately Rs 75 lakh in cash and about 160 metric tonnes of areca nuts.

The Ministry said the licence of a Customs Broker firm responsible for the clearance of most of the fraudulent areca nut imports has also been suspended.

The case centres on misuse of the preferential tariff framework under SAFTA, which provides customs duty concessions to eligible goods originating from member countries subject to compliance with prescribed origin rules.

The DRI, the country's apex anti-smuggling intelligence and enforcement agency under the Central Board of Indirect Taxes and Customs (CBIC), investigates cases involving customs duty evasion, commercial fraud and smuggling.