The Government has come across instances of transferring money out of the country illegally. Some of such cases detected indicate use of the medium of trade for such transfers which include overvaluation in imports, undervaluation in exports, remitting foreign exchange on the strength of forged import documents, payments/remittances for non-genuine purchases of goods/services/technical know-how, etc.

Recently, information about certain offshore entities held by various Indian persons has appeared in media. Such information is attributed to be part of ‘Panama Papers’ leaks. The International Consortium of Investigative Journalists (ICIJ), a Washington based organization which has reportedly made the revelations pertaining to the Panama Papers, has put a caveat on its website (www.icij.org) by mentioning that it should not be assumed that everyone who appears in the Panama Papers is involved in tax avoidance or evasion and there are legitimate reasons to create a company in an offshore jurisdiction and many people declare them to their tax authorities when that is required. The Government has taken necessary measures for expeditious investigation in such cases including through enhanced international cooperation.

The Government has constituted a Multi-Agency Group on 4th April 2016, inter alia, for facilitating coordinated and speedy investigation in the cases of Indian persons allegedly having undisclosed foreign assets and whose names are reportedly included in Panama Papers leaks. The Group consists of the officers of Investigation Division of the Central Board of Direct Taxes (CBDT), Foreign Tax & Tax Research Division of CBDT, Enforcement Directorate (ED), Financial Intelligence Unit (FIU) and Reserve Bank of India, and its Convener is Member (Investigation), CBDT. It has been asked to report the progress in such cases on regular basis. Investigation in such cases is at preliminary stage. Further course of action depends upon outcome of the investigation in respective cases.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha.

Offshore asset investigation launched to probe undisclosed foreign holdings after media leaks, coordinated by a multi-agency group. Investigation focuses on alleged illegal outward transfers using trade channels and offshore entities, including overvaluation in imports, undervaluation in exports, forged import documents and non-genuine payments; the Government formed a Multi-Agency Group comprising CBDT investigative divisions, ED, FIU and RBI to coordinate expedited inquiries into reported undisclosed foreign assets appearing in media leaks, with investigations at a preliminary stage and further action dependent on case-specific outcomes.