New Delhi, January 9: Government of the day seems to have no meaning for the giant Adanis. In UPA rule Adani minted money out of Diamond and jewellery exports but did not pay taxes worth over one thousand crores. Now in NDA rule Adani has been given a generous opportunity to continue to evade taxes. Economic and Political Weekly investigates the matter which puts a big question mark on the revenue department if union finance ministry.
So what Adani actually did was, it used, or rather misused various export incentive schemes through front companies which were owned by a set of firms of Adani Group. The set of firms owning several front companies worldwide created a complex structure which cannot be distinguished easily.
These companies ultimately owned by Adani Enterprises Limited were also used to launder money often through jewellery businesses.
The investigative wing of the Department of Revenue claimed that these small unnoticed firms misused the various export promotion schemes initiated by the Directorate General of Foreign Trade such as the Incremental Export Promotion Scheme.
As alleged, the Adanis took benefit of a certain scheme which involved "trading houses", in which avail of benefits is proportionate to the quantum of exports achieved.
Trading houses are corporate entities which are ranked on the basis of their total annual exports and the highest exporters are designated “star trading houses.”
After the Directorate General announced a scheme called the Duty Free Credit Entitlement scheme, the total export turnover of Adani group suddenly jumped more than 11 times, to be precise, by 1,181%.
The total turnover of Adani Group was 412.53 crore in 2002-2003 which rose to a whopping amount of 6,203.83 crores in the next year.
The Supreme Court in 2015, took note of the findings of the Directorate General and the Union of India while rejecting the appeals filed by others. The spectacular rise in the turnover of two firms, Rajesh Exports and Kanak Exports, also came into notice.
The turnover of Rajesh Exports had increased from 112 to 2,373 and that of Kanak Exports from 27 to 1,070. The more than 2,000% rise in exports came entirely in the form of gold coins and jewellery.
The Supreme Court also observed that there was a 1,135% surge in AEL’s exports during 2003-’04, whereas the company’s exports had declined in the preceding six years.