CAG Para 6 5 2 2012-13 Incorrect adoption of IBM Rates

Last modified at 09/06/2016 16:11 by Vanijyasachivalaya

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6.5.2 Incorrect adoption of IBM rates

Two Deputy Directors, Ilkal and Tumkur and Senior Geologist, Bellary

The royalty rates of iron ore were on tonnage basis till 12.09.2009 and 10 per cent ad valorem on the sale prices published by IBM thereafter.  Till 9 December 2009, an additional 20 per cent was added to the sale price published by IBM for the purpose of levy of royalty.  Further rule 64-A of the MCR prescribes levy of interest at 24 per cent per annum on any dues under the Act from the sixtieth day after the day fixed for payment.

Annual assessments in respect of six leases for the years 2009-10 and 2010-11 were finalised between April 2010 and April 2011.  In these cases royalty of Rs. 3.90 crore was levied on 5.19 lakh MT of iron ore as against the actual liability of  Rs. 4.57 crore.  This was due to non/incorrect adoption of IBM sale prices by the Department.  The resultant short levy of royalty works out to Rs. 66.76 lakh on which interest of  Rs. 13.01 lakh was also leviable. After these cases were pointed out between October 2010 and January 2013, the Department accepted the observations in two cases involving ` 42.26 lakh of which, notice was issued in one case. Replies have not received in the remaining cases (December 2013). These cases were reported to the Government in July 2013.  Their replies are not yet received (December 2013).

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