SIT asks ED, DRI to pull up erring companies

NEW DELHI: The Special Investigation Team (SIT) on black money has asked Enforcement Directorate (ED) and Directorate of Revenue Intelligence (DRI) to act against companies claiming duty drawback without repatriate export proceeds to check the black money menac

The SIT has directed ED to take action under Foreign Exchange Management Act (FEMA) with respect to 216 companies for the period before March 1, 2016 and 572 companies for the period after March 1, 2016, as each of these companies had over Rs 100 crore export proceeds pending realisation, the MoF said in a statement on Thursday.

"SIT also directed DRI to check from its database on how many companies have claimed duty drawback but have failed to bring export proceeds, (and) take necessary action against them as per law," the ministry said. The SIT — which was set up by the government in compliance with a Supreme Court directive in 2014 to look into issues relating to black money — also asked the Reserve Bank of India ( RBI) to immediately develop an institutional mechanism and IT system to red flag those cases where exports have been outstanding in violation of FEMA guidelines.

Not bringing export proceeds within a stipulated period is a violation of FEMA and amounts to illicitly parking funds abroad. RBI has also been asked to share data with the ED and DRI on a monthly basis. The central bank maintains data on exporters bringing in export proceeds.