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State lost Rs 865-cr revenue: CAG

By Staff reporter
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GUWAHATI, June 8 � An aggregate amount of over Rs 865 crore was lost by the State to the oil companies, Central government and coal miners during the financial year that ended on March 31, 2010, says the third Report of the Comptroller and Auditor General (CAG) of India on the Assam Government's performance in the area of revenue receipts for 2009-10. The report was tabled in the State Assembly here today.

The report has also stated that the failure of the senior officials to enforce accountability resulted in non-settlement of 4,033 paragraphs of 1,518 inspection reports of Principal Accountant General (Audit), Assam, involving an amount of Rs 767.23 crore, at the end of June 2010.

The test check of records of 205 units of sales, value added tax, motor vehicles, state excise, forest, other tax and non-tax receipts conducted during the year, revealed under assessment, short levy, short demand and loss of revenue amounting to Rs 466.58 crore in 573 cases, the report says.

The CAG report has stated that suppression of production of crude oil, condensate and natural gas by Oil India Limited (OIL) and Oil and Natural Gas Corporation Ltd (ONGCL) led to short payment of royalty and interest of Rs 168.48 crore.

The non-payment of royalty (April 2008 to March 2009) on deducted discount on well head prices of crude oil distributed to oil marketing companies deprived the State of a revenue amounting to Rs 525.04 crore, says the CAG report.

It further says that different royalty of Rs 10.48 crore payable by the Central Government from Oil Industry Development Board Fund, was not claimed and realized by the State government.

Moreover, due to computation of oil price at lower side during 2004-05 and 2008-09, ONGCL evaded royalty of Rs 119.01 crore, including interest. On the other hand, failure of the State's Geology and Mining Department to enforce payment of royalty on natural gas at well head price resulted in short realisation of Rs 24.56 crore, including interest.

Also, the adoption of incorrect method for determination of royalty payable on natural gas resulted in loss of revenue of Rs 11.97 crore, while payment of royalty on the quantity of coal dispatched from the leased area instead of actual quantity extracted at pit mouth resulted in short payment of royalty of Rs 6.45 crore, says the report.

The CAG has observed in its report that the department had prepared its annual budget estimates for the financial year without reference to the past trends and future potential.

The Geology and Mining Department of the State realises revenue from major minerals and from minor limestone (minor mineral), which comprises application fees for mining lease or prospecting licence, royalty, dead rent, surface rent, fines or penalties and interest on belated payment of dues.

Levy and collection of royalty from other minor minerals are entrusted to the Forest and Environment Department. As of March 2009, there were 13 petroleum exploration licences (PEL) � ONGCL 7 and OIL 6, comprising an area of 6,299 square kilometres (kms) � ONGCL 4010 sq kms and OIL 2,280 sq kms.

At that time, there were 36 petroleum mining leases (PMLs)-ONGCL 20, OIL 15 and Canoro Resources Limited 1, covering a lease area of 4,637.78 sq kms held by ONGCL-687.69 sq kms, OIL 3897.34 sq kms and Canoro Resources Ltd 52.75 sq kms.

The total leased area as on March 31, 2009 was 10,936.78 sq kms, which was 13.94 per cent of the State's total area-that is, 78,438 sq kms, says the CAG report.

It has also observed that the share of total mining receipts which was around 10 per cent of the total State receipts between 2005-06 and 2007-08 fell to 8.02 per cent in 2008-09. The percentage share of total mining receipts in the non-tax receipts which had been increasing steadily every year and had reached 84.41 per cent in 2005-06, declined to 63.81 per cent in 2008-09, mainly due to the act of fixing royalty on the post-discount prices on crude oil, the CAG report says.

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State lost Rs 865-cr revenue: CAG

GUWAHATI, June 8 � An aggregate amount of over Rs 865 crore was lost by the State to the oil companies, Central government and coal miners during the financial year that ended on March 31, 2010, says the third Report of the Comptroller and Auditor General (CAG) of India on the Assam Government's performance in the area of revenue receipts for 2009-10. The report was tabled in the State Assembly here today.

The report has also stated that the failure of the senior officials to enforce accountability resulted in non-settlement of 4,033 paragraphs of 1,518 inspection reports of Principal Accountant General (Audit), Assam, involving an amount of Rs 767.23 crore, at the end of June 2010.

The test check of records of 205 units of sales, value added tax, motor vehicles, state excise, forest, other tax and non-tax receipts conducted during the year, revealed under assessment, short levy, short demand and loss of revenue amounting to Rs 466.58 crore in 573 cases, the report says.

The CAG report has stated that suppression of production of crude oil, condensate and natural gas by Oil India Limited (OIL) and Oil and Natural Gas Corporation Ltd (ONGCL) led to short payment of royalty and interest of Rs 168.48 crore.

The non-payment of royalty (April 2008 to March 2009) on deducted discount on well head prices of crude oil distributed to oil marketing companies deprived the State of a revenue amounting to Rs 525.04 crore, says the CAG report.

It further says that different royalty of Rs 10.48 crore payable by the Central Government from Oil Industry Development Board Fund, was not claimed and realized by the State government.

Moreover, due to computation of oil price at lower side during 2004-05 and 2008-09, ONGCL evaded royalty of Rs 119.01 crore, including interest. On the other hand, failure of the State's Geology and Mining Department to enforce payment of royalty on natural gas at well head price resulted in short realisation of Rs 24.56 crore, including interest.

Also, the adoption of incorrect method for determination of royalty payable on natural gas resulted in loss of revenue of Rs 11.97 crore, while payment of royalty on the quantity of coal dispatched from the leased area instead of actual quantity extracted at pit mouth resulted in short payment of royalty of Rs 6.45 crore, says the report.

The CAG has observed in its report that the department had prepared its annual budget estimates for the financial year without reference to the past trends and future potential.

The Geology and Mining Department of the State realises revenue from major minerals and from minor limestone (minor mineral), which comprises application fees for mining lease or prospecting licence, royalty, dead rent, surface rent, fines or penalties and interest on belated payment of dues.

Levy and collection of royalty from other minor minerals are entrusted to the Forest and Environment Department. As of March 2009, there were 13 petroleum exploration licences (PEL) � ONGCL 7 and OIL 6, comprising an area of 6,299 square kilometres (kms) � ONGCL 4010 sq kms and OIL 2,280 sq kms.

At that time, there were 36 petroleum mining leases (PMLs)-ONGCL 20, OIL 15 and Canoro Resources Limited 1, covering a lease area of 4,637.78 sq kms held by ONGCL-687.69 sq kms, OIL 3897.34 sq kms and Canoro Resources Ltd 52.75 sq kms.

The total leased area as on March 31, 2009 was 10,936.78 sq kms, which was 13.94 per cent of the State's total area-that is, 78,438 sq kms, says the CAG report.

It has also observed that the share of total mining receipts which was around 10 per cent of the total State receipts between 2005-06 and 2007-08 fell to 8.02 per cent in 2008-09. The percentage share of total mining receipts in the non-tax receipts which had been increasing steadily every year and had reached 84.41 per cent in 2005-06, declined to 63.81 per cent in 2008-09, mainly due to the act of fixing royalty on the post-discount prices on crude oil, the CAG report says.

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