| Date: |
08-04-2016 |
| Subject: |
DRI probes over-valuation of coal imports by power cos |
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MUMBAI: The Directorate of Revenue Intelligence (DRI) has issued a nationwide alert to its offices and customs formations to scrutinise coal imports for over-valuation.
The alert follows intelligence received by the directorate that over-valuation in coal imports from Indonesia is continuing, and is rampant. The DRI has been investigating 40 power-generating companies and traders for the past couple of years. It has flagged prominent public and private sector companies that are suspected to be inflating the import value of coal beyond that prevailing in the international market.
According to the DRI alert, "the objective is to siphon off money abroad" while "availing higher power tariff compensation based on artificially-inflated cost of the imported coal". The intelligence further indicated that while the coal was directly shipped from Indonesian ports to importers in India, the import invoices were routed through one or more intermediaries based in a third country such as Singapore, Dubai, Hong Kong and British Virgin Islands. These intermediary firms appear to be either subsidiaries of Indian importers or their front companies. This was for the "sole purpose of creating layers (typical of trade-based money laundering) and artificially inflating its landed value", the alert said.
This results in a situation where not only are the end-users paying a considerably higher tariff on account of over-valuation of imported coal but are also being supplied with electricity generated from inferior quality coal. "This is tantamount to deceiving the consumer at two levels. The electricity tariff issue will be looked into by the Central and State Electricity Regulatory Commissions (CERC & SERC)," a DRI official said.
Companies under the scanner include five from the Adani Group, ADAG's Reliance Infrastructure and Rosa Power Supply, Essar Oil and Essar Power Gujarat, JSW Steel and India Cements, along with PSUs like MSTC, NTPC and MMTC.
"In a significant number of cases", the DRI recovered two sets of test reports issued at load port by two different testing agencies for the same consignment of coal - one showing lower gross calorific value (GCV) and the other higher GCV. The test reports with lower GCV appear to be in conformity with the contracts between subsidiary companies or intermediary agents of Indian importers and Indonesian suppliers, reflecting the actual value of the coal.
The test reports with higher GCV, submitted to Indian customs at the time of import, is in line with the supply contracts between the subsidiary companies or intermediary agents of the Indian importers and the power generation companies/Indian importers, reflecting the inflated value of the coal.
Source : timesofindia.indiatimes.com
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