Imports - Exports related issues

Under Invoicing / Over Invoicing

The latest scam has brought to light some of the issues the bankers are facing from some 'fraudulent' customers.

Strictly speaking, the material to be imported / exported should be correctly invoiced and should be declared in Bill of Entry / Shipping Bill accordingly.   However some clients do indulge in over / under invoicing based on their 'requirement' to either bring in excess money stashed abroad OR to send excess money abroad for storing OR to claim duty drawbacks wherever applicable.    Ultimately it will result in either Money Laundering or cheating the Government or fudging accounts in case of capitalisation of exports, etc.

It becomes difficult for bankers and customs authorities alike to keep a check on those, as nowadays many transactions take place on 'declarations' and such declarations are also accepted on 'face value' or 'as given'.

It may not be possible for customs authorities to check each and every item to determine value, unless there is suspicion.  So random checking is the only solution.

Unless the clients are genuine and compliant to regulations, it will be difficult to arrest such defaulters.

Care: 

Bankers should check the invoice with Shipping Bill / Bill of Entry and any difference should be questioned.  Whenever there is doubt for aberration, bankers can discreetly check with the industry associations.