Commerce Ministry short-fixed export obligations by Rs 3060 crore: CAG

NEW DELHI: In a scathing attack on the Commerce Ministry, the Government auditor CAG has said that export obligations to those given import duty sops were short-fixed to the extent of Rs 3,060 crore.

Several exporters who availed duty concessions in import of capital goods did not fulfill their export obligations to the extent of Rs 3,060 crore, the CAG said in its report presented in Parliament today.

The figure was arrived at by CAG which picked up 1814 cases for its scrutiny which found irregularity in 95 cases.

"We have found a total of 168 cases (9.3 per cent) of 1,814 in which errors in calculation resulted in short fixation of export obligation....," it said.

The government had foregone revenue of Rs 38,188 crore on this scheme between 2005-2010.

As per the provisions of the Foreign Trade Policy 2009-14, concessional duty of three per cent is levied under the Export Promotion Capital Goods (EPCG) scheme, subject to export obligation equivalent to eight times of duty saved to be fulfilled in eight years.

The CAG recommended that the Directorate General of Foreign Trade ( DGFT) should ensure that irregularities do not recur.

The CAG said it was not satisfied with the DGFT response. "The reply of the DGFT is not acceptable as checks by any external agency do not absolve the normal functioning of departmental internal control mechanism in any manner," it said.

It also said that the CAG has found 26 other cases where errors by regional licensing authorities resulted in short fixation of specific export obligation by Rs 144.51 crore.