NEW DELHI: The central revenue intelligence officials of India have started investigations into alleged misuse of government facility to reimburse taxes incurred in export of ready-made garments.
It is important to note that ready-made garments have traditionally been among the evasion-prone commodities. Some instances of alleged misuse of the government’s duty drawback scheme by some ready-made garments exporters have been spotted by the officials and are being looked into, official sources said.
The duty drawback scheme is aimed at promoting export by compensating all duties or taxes embedded in cost of manufacture of exported goods.
The exporters have been allegedly misusing the scheme as there is difficulty in ascertaining the market value of the ready-made garments being exported. An exporter may quote higher price on a low quality ready-made garments to claim higher reimbursement, the sources said, explaining the reason behind such evasion.
