Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/225796
Title: Export Fraud in India
Authors: Bussy, Adrien 
Jagil, Mehtab Ahmed
Keywords: Tax fraud
international trade
tax revenues
misreporting
duty drawback
Issue Date: 4-Feb-2022
Citation: Bussy, Adrien, Jagil, Mehtab Ahmed (2022-02-04). Export Fraud in India. ScholarBank@NUS Repository.
Abstract: We investigate tax fraud in a major export-promotion program in India – the Duty Drawback scheme – which enables exporting firms to claim a cash rebate proportional to the value of their exports, at a product-specific drawback rate. We detect fraud based on two approaches. First, we show that bilateral trade asymmetries between reported exports by India and reported imports by trading partners of the same trade flows are systematically correlated with the rate of drawback, suggesting that exporting firms over-report exports to unduly gain duty drawback. Second, we find evidence of excess bunching in the distribution of unit values reported by India at kinks in the per-unit drawback schedule, relative to the distribution of unit values reported by importing countries. Our results suggest that fraud currently detected by customs represents only 3.8%-6% of actual fraud.
URI: https://scholarbank.nus.edu.sg/handle/10635/225796
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