Customs officials seize 161.94 tonnes of incense sticks from Vietnam at Chennai port

Customs officials seized 161.94 tonnes of incense sticks and 68.36 tonnes of incense sticks powder from Vietnam at the Chennai port, after it found that a Bangalore based company was importing these materials under a free trade agreement without paying 15% duty applicable.

In an attempt to escape paying required taxes, the company – Indian Agarbatti Manufacturers, Bangalore – declared the goods to be joss powder and premix powder for making incense sticks, that don't attract any duty under FTA with ASEAN which includes Vietnam, the Central Board of Indirect Taxes and Customs (CBIC) said in a statement Thursday.

“This is one of the biggest seizures of restricted items in recent times at the port,” the authority said. Customs officers have arrested Bharat Shah and Ronik Shah at Chennai after seizing the goods concealed in containers imported by the company.


Joss powder is normally chargeable to 15% Customs duty but the duty is ‘Nil’ under the Free Trade Agreement (FTA) with ASEAN which includes Vietnam. Agarbattis have been placed in the restricted category since August last year and cannot be imported without a license. The importer was thus trying to take advantage of the FTA as well as use the items covered thereunder to conceal and smuggle restricted incense sticks.

Due to large scale misuse of ASEAN FTAs, a review of or total withdrawal from the FTAs are being demanded by Indian manufacturers, people aware of the developments said.