Tax officials tighten the Noose around shipments from China that are under-invoiced
The Economic Times stated that tax authorities in India are looking into under-invoicing of items imported from China after trade data revealed a startling disparity of about $12 billion between the data sourced from China and India. Comparing the trade data from the two nations reveals that India’s invoiced imports are far lower than China’s exports to India. Since September, 32 importers have received tax evasion letters from customs officials after they became aware of the situation. Tax authorities believe that from April 2019 to December 2020, firms under-invoiced the government by more than Rs 16,000 crore. Let’s explore the notification in detail.
Tax officials tighten the Noose around shipments from China
According to The Economic Times, tax authorities in India are probing into under-invoicing of merchandise brought in from China after trade data indicated a stunning gap of around $12 billion between the data sourced from China and India. India’s invoiced imports are significantly less than China’s exports to India, according to a comparison of the two countries’ trade data. Also, know about Imports Data,
Customs officers learned about the issue in September and sent letters to 32 importers accusing them of tax cheating. Tax authorities estimate that businesses undercharged the government by more than Rs 16,000 crore between April 2019 and December 2020.
According to a 2019 analysis by the US-based think tank Global Financial Integrity, India lost a stunning $13 billion, or over Rs 90,000 crore, as a result of trade mis-invoicing, with imports from China accounting for the majority of these losses. According to a senior government official, the majority of these imports are electronic devices, gadgets, and metals, according to a story in the Economic Times.
Why is there under-invoicing of metals, electronics, and devices?
The Indian government has increased import taxes on electronic products and mobile phones in an effort to promote domestic manufacture; however, this higher tax has led to a rise in incidences of “under-invoicing” and tax fraud by businesses seeking to avoid customs fees.
India bought commodities totaling $79.16 billion between January and September 2022, according to official trade data. China’s exports to India during the same period totalled $89.99 billion, according to data on its customs.
Over time, this difference has only widened. For instance, in 2019 the difference between China’s exports and India’s imports from China was $6 billion ($68.35 billion vs. $74.92 billion). According to the report, this increased to $8 billion in 2020 and $10 billion in 2021.
However, the industry asserts that there isn’t much to it and that this gap is the result of the delay in the delivery of shipments and transactions on the high seas. Some people have also pointed to the variance in how various agencies interpret the data as a possible cause. ExportImportData provides reliable Imports Data, importer data, and much more. It also enables you to obtain data on the top exporters, HS Codes; India Import Data, etc. We are available to assist you and expand your business if you have any questions about the import-export data.