Monday, March 21, 2011

Tax returns expose Rs. 600-cr. illegal iron ore transactions

Bangalore, March 21, 2011

57 lakh tonnes of ore purchased from unlicensed dealers

The Department of Mines and Geology has initiated proceedings to recover Rs. 600 crore from iron ore exporters for buying a staggering 57 lakh tonnes of ore from unlicensed dealers since 2003-04.

According to sources in Hospet, the scam came to light when the Department of Mines and Geology tapped the offices of the Commercial Taxes Department and verified records. It was found that several dealers in Bellary (22), Hospet (120), Chitradurga (10) and Koppal (1) had purchased large quantities of ore from unlicensed traders. The unlicensed traders had illegally purchased ore from mining companies and passed it on to licensed traders who in turn had exported it.

The transactions would have gone undetected but for the monthly returns (FORM VAT 100) filed by the licensed traders. This showed that the registered dealers were buying large quantities of iron ore from unregistered dealers (URDs). The Department of Mines and Geology has started the process of recovering the losses by issuing notices to the dealers that made the illegal purchases. The notices state that the transaction is a clear violation of Section 4 and 21 of the Mines and Minerals (Development and Regulation) Act, 1957.

Records show that the value of purchase from URDs is immense: over 1/6th of the total illegal exports from Karnataka (57 lakh tonnes out of 3 crore tonnes) .

In Bellary taluk alone, it is to the tune of Rs. 108.78 crore for the year 2009-10 through 22 dealers. In Hospet, 120 dealers purchased ore from URDs to the tune of Rs. 449.93 crore for five years from 2005-06 to 2009-10. While 10 dealers in Chitradurga acquired Rs. 11.47 crore worth ore illegally between 2005-2006 to 2007-08, one dealer in Koppal purchased Rs. 5.50 lakh worth ore from URDs between 2005 and 2009. The ore was transported to the Krishnapattanam Port in Andhra Pradesh and the companies continued to transport and export ore from this port. It should be noted that the State Government has also imposed a ban on export of iron ore from the sea ports in its jurisdiction.


Interestingly, the registered dealers made the declaration in the monthly returns with an eye on the 4 per cent tax rebate on exports.

While this illegal practice has been going on from 2003, it came to light only after an inter-departmental verification between the Mines and Geology and the Commercial Taxes departments.

This in-depth inquiry itself is a fall-out of Chief Minister B.S. Yeddyurappa admitting in the Legislature that more than 3 crore tonnes of iron ore had been illegally exported out of Karnataka.

The Lokayukta has also filed an interim report on illegal mining.

News From:

No comments:

eXTReMe Tracker