Sleuths Raid 80 Firms Across Several States
The Directorate of Revenue
Intelligence (DRI) has unearthed a scam involving companies inflating
the value of coal imports from Indonesia for their power plants thus
siphoning money abroad. Initial estimates by the agency pegged the
overvaluation at Rs 29,000 crore between 2011 and 2014. DRI has
raided more than 80 shipping companies, intermediaries and laboratories
in Maharashtra, Delhi, Gujarat, Karnataka, Andhra, Odisha, West Bengal
and Kerala, among other states, in search of documents that show the
real value of the imports. The agency has searched almost all
laboratories testing coal
in India to obtain reports for verification of the calorific value of
the imported coal.The overvaluation also has an impact on what consumers here pay as power companies can have a higher tariff fixation based on the inflated rates. The tariff would be less -possibly by Re 1 per unit -if the value of coal was not inflated. The Directorate of Revenue Intelligence (DRI) is also investigating some public sector companies that have indulged in overvaluation of coal imports.
An official said almost every importer, including the reputed corporates, has inflated the value of coal imports. DRI is learned to have recovered documents showing the real value of the imports. Indian companies including public sector ones imported 77 million tonnes of coal from Indonesia, in the financial year 2012-13.
Industry sources estimated that around 12 crore MT of coal was imported from Indonesia between 2012 and 2014. They added that the imported coal from Indonesia was overvalued to the extent of at least two times the actual value declared in the country of origin.
The modus operandi adopted by the companies is that while coal imports would directly be shipped from Indonesia, the invoices will be routed through an intermediary based either in Hong Kong, Singapore or Dubai.“The inflated amount will be sent to the intermediary who, in turn, would remit the actual value to the Indonesian supplier. The overvalued component would be diverted to tax havens,“ the source said. The intermediary is either related to the importer or handles such operations on commission basis, sources said.
DRI has found that the companies did not avail of the Preferential Trade Agreement that extended concessional duties for imports from Indonesia.Steam coal imported from Indonesia attracts zero rate of duty and the companies are required to produce country of origin certificate issued by the supplier.
