Smuggling of High Speed ​​Diesel (HSD) results in revenue loss of Rs 2,500 crore to Maharashtra treasury

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The rampant smuggling of high-speed diesel (HSD) on the high seas off the coast of Mumbai has caused a major revenue loss of Rs 2,500 crore every year to the Maharashtra treasury.

An intelligence report from the Central Economic Intelligence Bureau had alerted the Central Board of Indirect Taxes and Customs to HSD smuggling in the seizure of biofuel sludge oil to evade customs tariffs.

The report highlights the illegal importation and smuggling of HSDs prevalent at all major customs ports including the ports of Nhava Sheva, Mumbai, Kandla and Mundra.

“Intelligence gathered indicates that organized syndicates have engaged in the illegal import/smuggling of High Speed ​​Diesel (HSD) from the UAE. The information further indicates that the imported items are usually declared as “SN50 base oil”, “hydrocarbon oil” and “mud oil”. Items declared as ‘base oil SN50’ are in the clear, but there is no item called SN50 in the base oil market and the item is actually diesel,” reads the accessible report. exclusively by The Free Press Journal.

High Speed ​​Diesel (HSD) is classified under the Customs Tariff Act and can only be imported by state trading enterprises.

A high-level joint meeting chaired by Dy CM and State Finance Minister Ajit Pawar was held last week with senior officials from Customs, GST, Coast Guard, Police and State and State Excise Department to plug leaks of contraband diesel entering the state, evading duties and causing lost revenue.

Officials were made aware of the smuggling of diesel as part of the seizure of class “C” petroleum products free of import, such as hydrocarbon oil, base oil, marine fuel and heating oil to escape action.

“The oil mafia active on the high seas uses the international cruise passage to smuggle HSD to evade customs levies and state taxes on petroleum products. The organized crime syndicate is engaged in the illegal sale of contraband HSD as biodiesel on the open market,” explained a senior state excise official leading the smuggling and smuggling investigation. sale of diesel in Mumbai.

State excise officials lamented the lack of testing by Customs officers for petroleum products imported and cleared from Customs Freight Stations (CFS) without verifying sample parameters for Class “A” products. » restricted such as petrol, diesel and LPG.

“The oil mafia adjusts the parameters of smuggled diesel and the sampling labs do not sufficiently define the imported fuel. A slight modification of the HSD parameter allows contraband hydrocarbons, such as diesel fractions, to pass as sludge, furnace and base oil. The exact contents of the product sample should be defined if it is free to import petroleum products or smuggled diesel,” state excise officials asserted at the high-level meeting.

The officials further alleged that the contraband diesel is then available on the open market as biofuel to avoid taxes and demanded that “Customs and GST have a data sharing policy which should share data with the ‘state for the end use of fuel imported before the release to verify illegal sale of smuggled diesel.

The state government has started cracking the whip and sealing off unauthorized biodiesel berths in Nandurbar, Nasik, Dhule, Nagpur, Nanded, Beed, Buldhana and Palghar.

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