Nine companies in dock for Rs 3,164 cr sales tax evasion

Nine steel and aluminium companies operating in the state have been found to have defaulted on sales tax evasion worth Rs 3,164 crore, according to a report by Special Investigation Team of the State Vigilance.

The defaulters' list includes Vedanta Aluminium Ltd (VAL), Bhushan Power & Steel Ltd, JSL Ltd (formerly Jindal Stainless Ltd), Visa Steel Ltd and Rathi Steel Ltd among others. The evasion mostly pertained to showing some of the taxable components of operation as non-taxable by these companies, said an official source.

Taking note of the serious evasion by these companies, the state finance department has decided to serve notices on these firms. A departmental review meeting would be held on Tuesday in this connection.

“The state finance department will issue showcause notices to the errant companies that have defaulted on sales tax payment. If these companies fail to offer adequate explanation, action will be taken,” said state minister for finance and public enterprises Prafulla Chandra Ghadai.

It may be noted that the Special Investigation Team of the State Vigilance was constituted as per the direction of the Orissa High Court.

This comes close on the heels of recent exposure of multi-crore fraud by the Kolkata-based Rashmi Metaliks in railway freight charges in transportation of iron ore from the state.

The case related to transport of 1.8 million tonnes of iron ore by the company between 2008 and 2011 under concessional freight rates of railways meant only for domestic consumption. The company had exported the said quantum from the Haldia port, thus duping Railways of its genuine freight charges.

Meanwhile, South-Eastern Railways has Rashmi Metaliks to pay Rs 660 crore, including Rs 528 crore penalty and Rs 132 crore export freight charges.

The procurement license of the company was cancelled by the deputy director of mines of the Joda circle on the basis of the letter of South Eastern Railways. The Orissa government has, however, not given permission to the company to procure minerals since then.