The tax authorities and a monitoring committee have associated and given a task to check the sales done inappropriately under the transactions of the GST compliance of the illegal iron ore which was grabbed in Karnataka.
An anonymous senior government official said that the Central Board of Indirect Taxes and Customs wants to check whether payment of the customs duty, central excise, and service tax in the pre-goods and services tax reign has been avoided or not by the sale, purchase or export of the inappropriate mined minerals.
This action is based on the case of 2009 which was filed in the Supreme Court to control the ore mining in Karnataka. An official who is not permitted to talk to the media said that the central government has no rights to talk about the case but is involved because the GST revenues are on stake. The official also said that the tax department also wants to involve in this case.
For prohibiting the inappropriate iron ore, a writ petition was filed in 2009 in the apex court after which the court transferred the case to the CEC (Central Empowered Committee) so that it can listen to the complaints and give necessary help to the petitioner on the steps which were taken by the government. So to investigate the case of the sale of inappropriate mined minerals CEC (Central Empowered Committee) formed a monitoring committee. In the year between 2006-2010, approx. 29 million metric tonnes of iron was grabbed.
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As per the data of Karnataka Lokayukta which happens to be the anti-corruption ombudsman the value of the illegally extracted iron ore was approx 12,228 crores given the commodities average value and foreign exchange in consideration.
Given below are such GST compliances on transactions which the tax department wants to investigate whether-
- On the sales, purchase or export of the inappropriate mined minerals, the central excise, customs duty, and service taxes has been collected or not
- On the sales, purchase or export of the appropriate mined minerals, the central excise, customs duty, and service taxes has been collected or not which was made via the monitoring committee before the GST era
- On the sales, purchase or export of the appropriate mined minerals, the central excise, customs duty, and service taxes has been collected or not which was made via the monitoring committee after the GST era
Before GST reign:
- On concentrated iron ore, the central excise was charged
- Service tax on payments done for leasing rights
- Customs duty toward the export of iron ore
The official said that the tax department wants to check the GST compliance transactions and also wants to confirm whether the tax liabilities has been issued or not.
The official also added that the Central Board of Indirect Taxes and Customs might ask for the help of the Directorate General of GST Intelligence to appeal the Supreme Court to confirm the GST Compliance.
The official said that the Supreme Court will provide the details of the compliance and tax collected in such transactions. The amount of customs duty collected while exporting the inappropriate iron ore will be verified by the Department of Revenue Intelligence.
The official said that 100% penalty will be charged by the tax authority because of the taxes were avoided on the value of inappropriately mined iron ore. The official also added that the penalty can only be charged by the tax department only on the tax avoided in former transactions but cannot demand the tax after five years of the applicable date.
The condition will be applicable to the companies having extracted iron ore extended from their leased area where the taxes have not been paid on the illegally encroached area.
Between 2006-2010, the inappropriately extracted iron ore was not checked and was exported from border areas of Karnataka and AP which most probably did not pay the customs duty.
As per the report of the Lokayukta, the companies which were exporting the illegal iron ore even after prohibition were state-run KIOCL Ltd. and Vedanta-owned Sesa Goa.
