Hairy business: Raids on hair exporters unearth Rs 85 crore undisclosed income

BENGALURU: The Directorate of Income Tax (Investigation) in Karnataka-Goa has unearthed a major scam of tax evasion in hair purchased and exported from temples, beauty parlours and ladies’ hostels. The forage carried out by taxmen during the last fortnight has resulted in a revelation of Rs 65 crore of previously undisclosed income as well as seizure of Rs 5 crore worth of concealed assets which include cash and jewellery from human hair exporters in the region. The DGIT officers seized Rs 2.5 crore unaccounted cash, Rs 2.5 crore worth of jewellery and 140 kgs of silver items from a human hair exporter in North Karnataka alone.

According to the official sources, some hair exporters purchase hair offered in temples, from beauty parlours and girls’ hostels and export them to Africa and Europe. Africa has a sizeable market of wigs, weaves and extensions made out of human hair. In 2015, it was estimated at $6 billion. The search teams also seized incriminating evidences of tax evasion that has been going on for many years. It was found that second quality sales and wastage sales are not accounted and declared in the IT returns apart from bogus billing of purchases to siphon of money into huge investments, added the source.