The Hindu Business Line : Marble export units `are evading duty'

THE 100 per cent Export Oriented Units (EOU) located in both Maharashtra and Rajasthan are systematically duping the Government through under invoicing as well as duty evasion, industry sources said.

The imports of rough marble blocks attract 20 per cent import duty plus 10 per cent penalty. As of now, the imports of rough marble blocks are under the list of `restricted items'.

The Centre has fixed a floor price of $300 per tonne. However, the processing units can import it but the quota is fixed on past performance of such units.

"The marble processing units located in and around Mumbai, Gujarat, Chennai are under facing serious problems and we strongly feels that the Government should under take the examination of Domestic Tariff Area (DTA) sales under DRI supervision along with the implementation of floor prices as applicable to other importers," the President of Rajasthan Marble Processors Association, Mr Shankar Singh Sisodia, said.

The modus operandi of these EOUs is simple .

According to confirmed sources, around 25 EOUs located in and around Rajasthan and Maharashtra have started importing in the last few months and had already done around 700 tonnes of rough blocks from European countries including Italy and Turkey.

Going by the rate of both import duties and fine penalty, the Government has incurred a loss of around Rs 15 crore. What is alarming is that goods of around 8,500 tonnes (400 containers) are expected to hit the Indian shores within few months, they said.

These importers have selected Kandla and ICD Udaipur for their operations and major consignments land at regular intervals. Few consignments were diverted to Mumbai too.

Explaining the system of duty evasion, the spokesperson of Rajasthan Marble Manufacturers Association said that rough marble blocks are imported by such EOUs at rates below $100 per tonne against the fixed floor price of $300 per tonne.

Since the custom authorities were not concerned with such valuation, these EOUs show them as export of finished marble with little value addition. However, such transactions always take on paper under the bogus names.

Such value-added exports mainly comprised of indigenous marble and many times marble waste that was ultimately dumped at the port of discharge abroad.

The imported rough blocks are then sold to (DTA) and declared as finished slabs or polished tiles. Once again, at this stage the import duty paid on such DTA sales are at a very low prices.

Thus circumventing policy restriction and import duties. Most of the goods are also diverted towards the local market creating problems for the marble trade, said a trader from Mumbai.

More Stories on : Granite & Marble | Taxation | Maharashtra

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