DRI detects duty evasion of Rs 600 cr on coal imports in Guj

A case of misclassification of coal by various importers allegedly to evade duty of around Rs 600 crore was detected by the Directorate of Revenue Intelligence (DRI) officials in Gujarat, sources said today.
"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.
"Coal importers from the state are under scanner, for reporting bituminous coal imports as steam coal," he said.
Steam coal was exempt from customs duty in 2012-13, but it attracted a concessional Counter Vailing Duty (CVD) of one percent. However, Bituminous coal attracted a duty of 5 percent and CVD of 6 percent.

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.
As per FM's budget speech, coal imports during April-December, 2012 in India crossed 100 million tonnes.