Fly ash brick units sell subsidised cement

Bhubaneswar: Although the state government is providing tax subsidy to fly ash bricks manufacturing units on purchase of cement, many such brick kiln owners are reportedly selling the subsidised cement in the open market in an attempt to make easy money.
Revealing the unholy practice of such fly ash brick manufacturer dealers, special DG (Vigilance) RP Sharma has recently written to commercial tax commissioner Saswat Mishra and sought his cooperation in this regard.
In his letter to Mishra, Sharma stated that during raids by sales tax wing of vigilance divisions at cement racks in Cuttack and Mancheswar railway stations, it was found that the brick manufacturers are illegally exporting huge quantity of cement and evade legitimate tax.    
Responding to the letter, Mishra urged the state government to impose 5 per cent value added tax (VAT) on fly ash brick manufacturing units.
Some fly ash brick making units have purchased cement and sold the entire amount without even setting up their manufacturing facility. Apart from loss of revenue, this illegal sale of cement adversely affects the amount of tax that would have otherwise accrued from registered cement dealers,”Mishra said in his letter to finance secretary TK Pandey Monday.     
Imposition of VAT would not affect the genuine beneficiaries because they would continue to get benefits of tax exemption on major raw materials like fly ash and capital goods purchased from outside the state, the commercial tax commissioner said.  
As per norms, the dealers can procure cement up to 10 per cent of inputs used in manufacturing of fly ash bricks. If VAT on fly ash is imposed, the government would get around `20-crore revenue every year, Mishra added.  
Currently, 1593 fly ash manufacturing units are registered under Orissa VAT Act and they are disclosing tax exempted sale of more than `300 crore per year.

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