BHUBANESWAR: Even as the State Government pushes utilisation of fly ash bricks to tackle huge generation by thermal power plants, many brick manufacturing units are found to be involved in large scale pilferage of cement which is one of the input materials.
The Commercial Taxes wing, in its investigation, has found tax suppression to the tune of Rs 15 crore after it was tipped off about the illegal cement trade by the State Vigilance last year. In some cases, it also collected penalty on the spot.
It is the modus operandi of fly ash manufacturers which prompted the Commercial Taxes Organisation to bring their operations under scanner. It found that many fly ash brick units were selling cement instead of using it in manufacturing activity. The units purchase cement at concessional rates but resort to out-of-account trading. Since cement is one of the raw materials for production of fly ash brick, it is included in the registration certificate of the dealer.
Although proportion of cement does not exceed 10 percent of inputs used in manufacturing fly ash bricks, the units take advantage of their position and procure large quantity of cement at concessional rates and sell those without paying any taxes.
A report by the Commissioner of Commercial Taxes (CCT) revealed that some fly ash units purchased and traded whole volume of cement stocks without even setting up their manufacturing facility. Apart from direct loss of revenue, such outright trade affected the tax that would have generally accrued from the registered cement dealers of the State.
Last year, Special DG Vigilance Dr RP Sharma had written to CCT Saswat Mishra stating that unloading of cement rakes at goods yards of Cuttack Railway Station and Mancheswar Station in Bhubaneswar by Vigilance and Sales Tax sleuths had led to huge discrepancies in cement stocks on business premises of fly ash brick manufacturing units and that of railway yards. It was later ascertained that the cement was being directly sold instead of being used in brick making process.
There are about 1,593 fly ash manufacturing units registered with the Government and these units disclose tax exempted sales to the tune of Rs 300 crore per year.The Commercial Taxes wing has proposed that if this turnover is taxed at five per cent rate, the Government could raise Rs 15 crore.
These manufacturers would not feel the pinch since they would continue to get tax exemption benefits on major raw materials, it said.