The Central Board of Indirect Taxes and Customs (CBIC) has informed the department of commerce that it has seized some consignments in relation to under-invoicing of imports from China, according to a government official.

The department of commerce had flagged the issue of under-invoicing from China with the department of revenue. While action is underway in the identified cases, CBIC has also increased risk- profiling for some consignments, said the official.

“We have flagged the issue with customs and department of revenue. The feedback we have received is that they are taking action for some consignments that have increased risk-profiling… to identify those consignments where under-invoicing is potentially high. Early reports suggest that some seizures are happening,” the official stated.

Mint has earlier reported that there was a $12 bn gap between the trade data released by China and India during the first nine months of 2022 owing to under-invoicing that causes losses to the Indian exchequer.

The Directorate General of Valuations under the CBIC has found that during April-July this year, stainless-steel flat products of J3 grade were imported at an average value of ₹87 per kg as against similar products of 201 grade being imported at an average value of ₹163 per kg.

Also, similar products of 201 and J3 Dual Grade were imported at an average value of ₹149 per kg.

The government is also learnt to be working on a valuation study to sensitize officials to prevent under-valuation.

According to reports, consignments pertaining to under-invoicing of imports from China under the government’s tax scanner are mostly electronic goods, gadgets and metals. Under-invoicing is done to evade customs duty.

Mint reported on 3 November about the mystery of a missing $12 billion in India-China trade in the January to September period.

While China claimed trade with India touched $103 billion in the first nine months of 2022, Indian data show that bilateral trade stood at just $91 billion. This is thought to be largely due to under-invoicing of shipments by Indian importers to avoid paying import taxes.

Last year, while Beijing claimed that it was India’s largest trading partner, New Delhi countered it, saying the US remained its largest trading partner.

Queries emailed to the ministries of commerce and industry and finance remained unanswered till press time.

The difference in the trade figures reported by the two countries has widened from $5.2bn in 2018 to nearly $12bn now.

Source : livemint