The government has decided to examine the popular export promotion scheme -- the Export Promotion Credit Guarantee Scheme -- to prevent its misuse in the wake of a car import scam coming to light recently.
An intra-departmental committee in commerce ministry will examine the EPCG scheme to check what, if any, measures are required to tighten it, official sources said.
The move comes following the unearthing of a car import scam, in which the Directorate of Revenue Intelligence arrested one Sanjay Bhandari, who had registered a four-star hotel History Logistics in Jaiselmer and North-West Marwar spa and resort and obtained import licences for cars from the Directorate General of Foreign Trade.
These old cars, after being refurbished and passed off for new cars, were sold to high profile customers. DRI, which arrested Bhandari on August 29, and since been conducting raids on his high profile customers and seizing cars like Mercedez Benz, Porsche and BMW for which payments were made mainly using the hawala network.
The hotel sector is allowed to import old cars without cars undergoing homologation for client use. They can import capital goods duty free under the EPCG scheme.
