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Centre orders inquiry after firm closes operations, alleges corruption at Chennai Customs
The Union Ministry of Finance on Thursday said it will inquire into corruption allegations made by a company earlier this week against officials at Chennai Customs.
The company, Wintrack Inc, said on Wednesday morning that from October 1, it would stop all import and export activities in India, alleging that in the preceding 45 days, Chennai Customs officials had “relentlessly harassed” them.
The firm claimed that after it exposed the department's bribery practice twice this year, the officials retaliated, “effectively crippling our operations and destroying our business in India”.
However, the Chennai Customs department denied the charges and said that the company had an “established pattern” of making allegations of corruption on social media and then deleting the posts.
The company's founder, Prawin Ganeshan, said that his allegations pertained to a shipment of personal massagers that are sold as sexual wellness products. He claimed that in August, customs officials, for the first time, questioned why charging cables for the massagers had not been declared separately.
“How can a factory sell a massager without a charging cable?” Ganeshan asked on social media. “The charging cable is included as part of the new product kit; every new product requires a charging cable to function.”
The company's founder said that the cables had always been part of the product's packing list. He claimed that for the first time, “EPR and LMPC compliances were manually requested”, leading to delays.
EPR refers to Extended Producer Responsibility, which is a certificate from the Central Pollution Control Board stating that the company will assume responsibility for recycling the batteries in the product in question. LMPC stands for Legal Metrology (Packaged Commodities) Rules, which pertain to how weights and labels need to be displayed, The Indian Express reported.
Referring to these compliance demands, Ganeshan remarked: “The law has loopholes, and officers exploit them at their discretion.”
The Chennai Customs described Ganeshan's allegations as “serious and false” and denied having harassed his company. It contended that the goods in the shipment in question had been misclassified and that the company had acknowledged this.
The department said that as the goods contained built-in rechargeable batteries, EPR registration from the Central Pollution Control Board was mandatory. It said that the company was given personal hearings, during which it submitted incorrect documentation and made legally untenable claims.
“At no stage was any payment or bribe demanded – all queries pertained strictly to mandatory statutory compliance,” the Chennai Customs maintained.
The Central Board of Indirect Taxes & Customs also said on X that the matter pertained to misdeclaration and misclassification. Noting that Ganeshan had made allegations against certain individuals and had posted screenshots of conversations with them, the CBIC said it will look into the matter.
Nevertheless, Wintrack's allegations sparked sharp reactions from political and business leaders. Congress MP Shashi Tharoor expressed dismay at the allegations and remarked that corruption remains rampant as part of the system.
“Most companies simply comply as part of the ‘price of doing business',” Tharoor said. “It does not have to be this way. Indeed it must not be like this if the country is to grow and prosper.”
Former Infosys Chief Finance Officer Mohandas Pai, in a post addressed to Finance Minister Nirmala Sitharaman, said that she had failed to stamp out systemic corruption at ports. “You are our FM and our PM Narendra Modi had promised us corruption-free rule. You have also failed to stop TAX TERRORISM.”
The Union finance ministry said on Thursday that the department of revenue has been asked to conduct a “fair, transparent, and fact-based inquiry” into the matter.
The ministry said that in recent years, the government has introduced several taxpayer-friendly measures to enhance transparency and promote the ease of doing business.
“The matter is being dealt with utmost seriousness, and the Government is committed to taking appropriate and expeditious action in accordance with the law,” the ministry said.
Source: Scroll
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