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Did Adani Group Evade ₹1,000 Crore Taxes?
The authors would like to clarify that the first paragraph in the “Conclusions” section (p 40) should have read as follows: “The DRI filed an appeal against the CESTAT order in the Supreme Court on 6 April 2016, which was eventually disposed of on 22 July 2016. The Ministry of Finance now has to file a review petition against this decision. The question that remains unanswered: what has dissuaded the ministry from filing this review petition even though more than five months have gone by?” This is the corrected version of the article.
The corporate conglomerate headed by Gautam Adani has been accused by the Directorate of Revenue Intelligence of having allegedly evaded taxes and laundered money to the tune of around ₹1,000 crore while trading in cut and polished diamonds and gold jewellery. The DRI has claimed that companies in the Adani Group misused export incentives and indulged in high-velocity circular trading through a complex web of front companies located in different parts of the world. The government seems strangely reticent about fi ling a review petition in the Supreme Court that could protect its revenue interests.
(This article was published as a Web Exclusive on 6 January 2017.)
Research and writing assistance was provided by Aarushi Kalra, Natasha Bhide, Maya Palit and Mugdha Kinjawadekar.
For more than a decade now, the Directorate of Revenue Intelligence (DRI) has been investigating how a clutch of companies in the Adani Group led by Gautam Adani allegedly evaded taxes and laundered money while trading in cut and polished diamonds and gold jewellery. The DRI, which is an investigative wing of the Department of Revenue in the Ministry of Finance, has issued a number of show-cause notices to firms in the group alleging evasion of taxes to the tune of roughly ₹1,000 crore. Adani is considered to be close to Prime Minister Narendra Modi.
While the allegations against the Adani Group have meandered through various tribunals and courts of law, questions are being raised as to whether the Ministry of Finance is deliberately dragging its feet in moving a review petition before the Supreme Court that could safeguard its revenue interests. Four detailed questionnaires were sent by the Economic & Political Weekly (EPW) to (i) Finance Minister Arun Jaitley and five of his senior officials; (ii) the Minister of State for Commerce and Industry Nirmala Sitharaman and the Director General of Foreign Trade; (iii) Law Minister Ravi Shankar Prasad; and (iv) Adani himself. These questionnaires were emailed and also sent by regular post on 18 November 2016. Whereas spokespersons of Adani and the law minister responded, Jaitley, Sitharaman and officials in their respective ministries did not answer the questions more than a month and a half after these were sent to them.
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