NEW DELHI: An unusual drop in the price of human hair consignments that are exported has led customs officials on to a smuggling trail ending in China which allegedly costs India over Rs 150 crore every year in income tax.
An alert sent out by the special investigations branch of customs in West Bengal said some human hair exporters are “artificially decreasing” the value of their consignments, of a variety called 0501, to Myanmar, Bangladesh and Vietnam.
Known as ‘goli’, ‘chutti’ and ‘thutti’ across India, a kilo costs between Rs 4,500 and Rs 6,000. But the top five exporters, for instance, showed that their consignments were priced between Rs 27.8 and Rs 1,400 a kilo. “The average unit price has decreased significantly from 2017 onwards,” the alert said.
When customs officials did a recce in West Bengal’s Purba Medinipur, they found the same hair was being sold at anything between Rs 2,800 and Rs 5,600 a kilo. This undervaluation enables evasion of FEMA compliance and income tax, and skipping the 28% import duty China imposes by smuggling products into its borders.