Photo/Illutration The door of a shop in Tokyo’s Minato Ward whose duty-free sales license was revoked by the Tokyo Regional Taxation Bureau (Yuji Harada)

The Tokyo Regional Taxation Bureau has found that about 10 stores were lying about selling duty-free items to foreign visitors and has revoked their duty-free sales licenses, according to sources.

Of the businesses, a jewelry store in Tokyo’s Minato Ward said it sold duty-free oval gold coins and other items to foreign visitors, according to the sources.

The store reported in a tax return that it paid consumption tax on these items when it purchased them from a jewelry-processing company in Taito Ward.

This then allowed the shop to claim a refund of several hundred million yen in taxes, of which they had already received a portion.

During a Tokyo tax officials’ investigation, however, multiple visitors from overseas who were said to have purchased these items said they actually hadn’t, and that they had not even visited the shop.

Officials, therefore, suspected the documents regarding the business dealings between the shop and the processing company were fake.

The shop denied it, but the officials still concluded the deals were fraudulent. 

As of Feb. 23, the shop had not replied to The Asahi Shimbun’s request for a comment.

Under the Consumption Tax Law, the head of the regional taxation bureau can revoke a duty-free sales license if operators are criminally charged for violating the law or when officials deem situations of the operators as duty-free shops “especially inappropriate.”

Operators are then banned from conducting duty-free sales for three years since the day the decision to revoke the license is issued.

The jewelry store’s case was apparently a case of being “especially inappropriate” because officials could not confirm that the shop conducted a duty-free sales business, and the shop did not cooperate with the investigation, the sources said.

There have been many cases of duty-free sales business operators abusing the consumption tax return system and illegally receiving money from the national treasury.

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