Xiaobao Lu and Xiuwen Shen front court over tax evasion through duty free scam

A Melbourne couple’s plan to avoid paying nearly $252k in taxes on a large stack of duty free items meant for export came unstuck.

Xiaobao Lu and her boyfriend Xiuwen Shen have avoided jail for not paying $252,000 in taxes on a large stack of duty free items they bought, purportedly for export.

A Melbourne couple who avoided paying nearly $252,000 in taxes on thousands of duty free items they bought without exporting them won’t spend a night jail

Xiaobao Lu and her boyfriend Xiuwen Shen purchased more than 6000 duty free items, including cosmetic products, from Lotte Duty Free in central Melbourne and signed declarations that the goods would be taken out of Australia.

Both made five trips to New Zealand between July and November 2022 and although they handed over receipts for the duty free purchases at Melbourne Airport, they didn’t take the items with them.

They pleaded guilty to a charge of engaging in conduct with the intention of dishonestly causing a loss to a Commonwealth entity.

Lu was sentenced to 22 months’ jail but released on a recognisance release order to be of good behaviour for 24 months when the couple appeared for sentencing in the County Court on Tuesday.

Shen was sentenced to 14 months’ jail but released on the same order to be of good behaviour for15 months.

Judge John Kelly said their remorse and prospects for rehabilitation were among factors the court took into consideration in imposing an appropriate sentence.

Lu’s mother was exceedingly vulnerable and dependent on her for support and that had struggled with anxiety since childhood, the judge said.

He said Shen played a lesser role, obtained a modest benefit from the offending and had no prior convictions.

Duty free items bought in Australia are exempt from Customs Duty and GST if they are exported within 60 days from purchase.

A Melbourne couple’s cunning ploy to avoid paying nearly $252,000 in taxes on duty free items has been unravelled.

Court documents stated the couple deposited receipts at Melbourne Airport’s duty free counter for $243,636 worth of purchases purported to be taken on their flight to Queenstown in New Zealand on July 3, 2022.

They did not return the duty free items to Lotte but kept them at their Port Melbourne home and in two storage units.

Both flew to New Zealand twice in August of that year and a further two times in October and November.

Victoria Police and Australian Border Force started an investigation after the latter was made aware of the couple’s activities of using the duty free system.

Investigators seized 6600 duty free items from the couple’s home and storage units at Port Melbourne in November 2022 and arrested them.