Department of Foreign Trade (DFT) have received complaints from several quarters about one exporter who is alleged to have indulged in book exports (actual exports have not taken place, only the books show as if exports

Forensic Audit of alleged book exports fraud The Forensic Auditor (FA) will go about examining various aspects connected with the alleged exports of Duryodhana Jewellers, Surat (DJS). Various aspects the Forensic Auditor would have looked into, the documents and records which the Forensic Auditor would have verified and related aspects involved are as under: Compare the track record of DJS for the past 5 years to see whether there is any alarming increase in the quantum of exports during the current year, as compared to the earlier / previous years. Verify the details of the alleged buyers for the exported product, to see whether such buyers are located in notified jurisdictional areas for Income tax purposes. In case there are notified jurisdictional areas buyers, deeper scrutiny is required. Bank records are to be thoroughly scrutinised to see whether there are actual remittances in foreign exchange from the alleged buyers. Investigate the origin and the manner of utilisation of the alleged remittances received from abroad for the exports. This will help to see whether the same are funnelled out of India for remittances again into India. Compare the rates shown in the various export invoices with the rates of sellers of similar products who also export. Production /stock records of DJS to be seen to examine the flow of production. Sales is possible only if stock is held and stock can arise only if they are produced or purchased. In case the inflow of stock is due to purchases, all the purchase invoices are to be verified. Related party transactions, if any, should be looked into and in case of any, deeper scrutiny is required. Form 3CD to be verified to look into transactions with related parties or with persons specified in section 40A (2) of the Income-tax Act, 1961. GST returns to be checked thoroughly to see how DJS has claimed the refund for GST paid on exports.