As many as 100 Indian coal importers have come under scanner after a case of misclassification of coal allegedly to evade duty of around Rs 600 crore was detected by the Directorate of Revenue Intelligence (DRI) officials in Gujarat.
“All importers of coal have misclassified their imports, which has led to short payment of duty. Coal imports. at the ports in Gujarat alone last year (2012-13) has led to duty evasion of around Rs 600 crore,” a DRI official said.
Steam coal was exempt from customs duty in 2012-13, but it attracted a concessional Counter Vailing Duty(CVD) of 1 percent. However, Bituminous coal attracted a duty of 5 percent and CVD of 6 per cent. Many Indian importers used to import bitiminous coal (which has higher value) and used to show steam coal.
As per DRI officials, tax recovery from all coal importers in the state has begun and over Rs 100 crore has been realised so far.
“Misclassification of coal imports was a nationwide phenomenon last year involving an estimated duty evasion of upto Rs 2,500 crore,” a DRI official said.
“The coal imports last year at ports like Tuiticorin, Paradip, Mumbai, New Mangalore Port, amongst other are under scanner,” he said.
Alarmed over the trend, Union Finance Minister P Chidambaram, equalised the duty structure on coal in the 2013-14 budget.
“Steam coal is exempt from customs duty but attracts a concessional CVD of one percent. Bituminous coal attracts a duty of 5 percent and CVD of 6 percent,” he had said.
“Since both kinds of coal are used in thermal power stations, there is rampant misclassification. I propose to equalise the duties on both kinds of coal and levy 2 percent customs duty and 2 percent CVD,” he further stated.
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