Srinagar trader arrested for ₹30-crore duty drawback fraud

The accused, Irfan Rashid Khan, had created four companies and made wrong declarations regarding exporting silk carpets worth around ₹200 crore to avail duty drawback

The directorate of revenue intelligence (DRI) has arrested a resident of Srinagar in connection with a duty drawback fraud that caused a loss of ₹30 crore to the government, officials said on Thursday.

Duty drawback is the rebate of duty chargeable on any imported material used in manufacturing goods exported from India. (Image for representational purpose)

The accused, Irfan Rashid Khan, had created four companies and made wrong declarations regarding exporting silk carpets worth around ₹200 crore to avail duty drawback. He was exporting regular carpets instead of silk carpets, which were first sent to Delhi from Srinagar and then exported.

Duty drawback is the rebate of duty chargeable on any imported material used in manufacturing goods exported from India.

On the direction of DRI additional director general Nitin Saini, Ludhiana officials investigated four companies of the accused. One company was created in his name, while the others were in the names of his brothers and friends. However, Khan was running all the companies.

Recently, the department had issued summons to the accused after they suspected a fraud. During the investigation, the accused admitted that he exported regular carpets of around ₹200 crore by declaring those as silk carpets between 2018 and 2021.

Khan was produced in a local court, which sent him to judicial custody. The case is being probed and transactions with other companies are also being scanned.