State's VAT collection decline due to surge in illegal diesel trade; govt orders action

Guwahati, Feb 13: There has been a sharp decline in VAT collections leading to the revenue losses due to the illegal transportation of diesel into the state.

Chief Secretary Dr Ravi Kota recently held a meeting with the District Commissioners and Superintendents of Police to chalk out a plan to tackle the situation.

During the meeting, the Commissioner and Secretary of the Finance Department emphasised that the illegal influx of diesel has significantly impacted state revenues, particularly in border-district areas and international boundaries.

The Chief Secretary said that to curb tax evasion, the Tax Department in coordination with the police administration has been tasked with drafting a Standard Operating Procedure (SOP) incorporating strict penal provisions. As part of the enforcement strategy, physical vigilance will be intensified through joint operations by police and tax officers. Special focus will be placed on border districts, with SPS and DCs of Lakhimpur and Tinsukia ordered to conduct joint vigilance operations immediately.

Additionally, all DCs have been instructed to enforce strict monitoring of petrol and diesel movement to and from neighbouring states and conduct inspections of petrol pumps, storage facilities, and pump storage facilities, and implement GPS tracking for fuel tankers.

"The illegal transport of petroleum products poses a significant threat to public safety, necessitating stringent enforcement measures," said the Chief Secretary.

Authorities have mandated strict verification of transport documents, including road permits (Form-62), invoices, consignment notes, and transporter manifests, as per the Assam VAT Act.

The North East India Petroleum Dealers' Association, the Greater Guwahati Unit, which was present at the meeting, expressed concerns over the VAT evasion on diesel sales.

In a statement, the association today said, "VAT on diesel is a major revenue source for the state government, aiding in funding vital programmes in infrastructure, education, healthcare, and social welfare. The oil companies have been unlawfully diverting diesel sales from their depots in Arunachal Pradesh, Nagaland, and Mizoram to bulk consumers in Assam. This shift allegedly circumvents the higher VAT, resulting in substantial revenue losses for the Assam government."

"The evasion of VAT is expected to lead not only to revenue losses, estimated at around Rs 250 crore a month for the Assam government, but also to unfair competition among businesses adhering to tax laws," it added.

By

Staff Reporter