Rs 65 cr illegal income of Karnataka hair exporters detected

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Bengaluru, Jan 2 : Income Tax raids on human hair exporters in Karnataka recently resulted in disclosure of Rs 65 crore and seizure of crores in cash and jewellery from them, said an official on Tuesday.

“Tax evasion even on income from hair offered by devotees in temples was found by our investigation directorate teams,” said Joint Director G. Ramesh in a statement here.

The tax sleuths raided hair exporters in the state and seized Rs 2.5 crore in cash, jewellery valued at Rs 5 crore and 140kg silver from their residences. 

“Inmates of women’s hostels in the state were also found to be in the business of cutting their long locks and selling them to earn easy money,” said Ramesh.

Besides from temples, the exporters bought human hair from beauty parlours and shipped it to Africa and European countries where fascination for dry hair is high for weaves, wigs and extensions.

The dry hair market worldwide was estimated to be a whopping $6 billion (Rs 38,400 crore) in 2015.

“The search teams also found evidence of tax evasion by the hair exporters for many years,” said Ramesh.

For instance, exporters did not account for second quality sales and wastage sales and have not declared income on them in their income tax returns.

“The Directorate General of the Income Tax in the Karnataka-Goa region is carrying further investigation to ascertain tax evasion by the exporetrs,” added Ramesh.