ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Adani Group Accused of Evading ₹1,000 Crore Taxes in Diamond Trade

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 filing a review petition in the Supreme Court that could protect its revenue interests.

Exim Policy 2002-07

Against the background of the dismal export performance in 2001-02, the Exim Policy had to be made to sound ambitious and innovative. However, in effect it amounts mostly to continuation of existing schemes. The real snag is the lackadaisical attitude of the central and state authorities in implementing policies, as is so tellingly brought out by the progress, or lack of it, of the Special Economic Zones scheme.

Duty Exemption and Remission Schemes

Under a fully WTO-compatible trade regime, to which India is committed, the only weapon available in normal circumstances to check imports which damage domestic industry is flexibility in fixation of customs duties subject to the committed bound rates. But as imports under the export-linked schemes are duty-free, a surge in such imports cannot be arrested through the tariff rate mechanism. It is necessary, therefore, to rationalise the duty exemption and remission schemes in the EXIM Policy 2002-07 to be announced shortly.
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