HYDERABAD: Enforcement Directorate (ED) investigations have revealed that around Rs 16 crore was paid to human hair merchants by Chinese online betting app companies as part of hawala transactions. Two hair exporting firms based in Hyderabad are said to have received Rs 3.4 crore from the Chinese companies.
The firms received money for domestic sales to merchants in north-east through illegal Chinese app owned by Linkyun Technology Private Limited and Dokypay Technology Private Limited Company’s Paytm accounts. The two companies are being probed by Hyderabad police and ED.
“...It was found that many domestic merchants were aggregating and selling raw hair to foreign merchants based in Hyderabad, Guwahati, and Kolkata...these are smuggled out of India via road via points at Moreh (Manipur), Zokhawtar (Mizoram), Aizwal (Mizoram) to Mandalay (Myanmar). Ultimately, it finds its way to China where they are labelled as domestic Chinese hair and processed,” ED said.
The ED said that, as a result, Chinese traders were able to avoid import duty of 28% and also earn 8% export incentives by claiming smuggled Indian hair as Chinese. Indian exporters are also suspected to be under-valuing exported hair to evade import duties in recipient country.
“A few Myanmar citizens are permanently stationed in Hyderabad, are purchasing human hair locally and then exporting it to Myanmar using the IEC code of Indian persons/entities at under-valued prices. The difference amount is settled either locally or through hawala channels,” the ED said.
Investigators are now analysing purchase, export prices and quality. Prima-facie, it is suspected that hair exported to Myanmar, Bangladesh, Vietnam, Austria etc are under-invoiced. Evidences have further revealed that some entities have been receiving payments against sale of hair in bank accounts of their employees who withdraw the cash and hand it over to the owners.
Most exporters were found not maintaining proper books of accounts and evading income tax liabilities.
