In one of the biggest operations against fraudulent transactions in electronic goods in the State, Commercial Tax officials have unearthed an undeclared warehouse operated by a Chinese national based in Wuhan city and seized Chinese-made electronic gadgets worth about ₹4 crore.
The seized items included mobile phones, chargers, mobile accessories, toys and even footwear, which were being sold on leading e-commerce platforms for nearly a year.
The warehouse located on Old Airport Road had 25,446 Chinese-made electronic and fast-moving consumer goods and the Chinese national has been found to be selling them on platforms such as Amazon and Flipkart, among others. The search operations started on June 24 and continued on June 25 too.
The modus operandi of the Chinese national was that he obtained the premises on lease, and over 60 registrations had been made under the GST Act in the name of a number of persons for online trading of Chinese-made goods.
The registrations were for both Central and State jurisdictions, and were found to have the same address, which was vacant.
Commercial Tax Commissioner Srikar M.S. said that most of the registrations were found irregular in filing of returns and payment of tax, and a majority of firms either filed nil returns or did not file returns. The data showed that while one business was registered in 2017-2018, as many as 43 businesses were registered in 2018-2019 and 14 during 2019-2020. One business was registered recently during 2020-2021. Most of the 60 firms were private limited companies and 24 persons were interchangeably directors in 58 firms.
The Additional Commissioner (Enforcement, South Zone) Nitesh K. Patil, who supervised the search, told The Hindu that the department estimated that the Chinese national --- using these 60 registration --- may have sold goods worth more than ₹20 crore since he took the warehouse on lease in June last year.
“We suspect that the Chinese national may have commenced full-fledged operations since 2019 after he took the warehouse. While he remained in India till about January, he may have left Bengaluru to Wuhan around the Chinese New Year and has got stuck there,” he said, adding that he continued his operations using the warehouse from China too. Further, he said that the Chinese national had not kept any accounts of business in India.
Mr. Patil said that the department would wait for a couple of days for these persons to turn up and provide accounts. “If they do not turn up, we will write to all the e-commerce platforms seeking the transaction details done with each of these registrations,” he said. Department sources said that the Chinese national used some of his contacts in terms of agents or employees in Bengaluru, and multiple registrations had been taken for better rating on e-commerce platforms.
At the time of the search, neither the Chinese national nor any of the 59 taxable persons were present at the business premises.
