JSW Steel Faces Rs 147.76 Crore Shortfall in Stamp Duty: CAG Report Reveals

Significant Revenue Shortfall Identified

Jajpur: According to a report from the Comptroller and Auditor General of India (CAG), JSW Steel Ltd has underpaid a staggering Rs 147.76 crore in stamp duty and registration fees linked to the increased production capacity at its Nuagaon iron ore mine located in Kendujhar district.

The report highlighted a total revenue deficit of Rs 148.46 crore across three mines situated in Kendujhar and Jajpur districts, attributing this to the failure to reassess stamp duty and registration fees following the rise in production capacity due to updated mining plans. The other two mines involved are the Gandhamardan iron ore block in Kendujhar and the Kaliapani chromite mine in Jajpur.

The shortfall from these mines was recorded at Rs 70 lakh. Under the Indian Stamp Act of 1899, as modified in Odisha, stamp duty is applicable on mining leases where the rent is fixed and no premium is charged. A notification from the state government dated August 5, 2008, set the stamp duty at 5 percent and registration fees at 2 percent.

A notification from the Steel and Mines Department on January 13, 2012, mandated that the maximum annual production outlined in an approved mining plan should be used for stamp duty assessments. Any increase in capacity necessitated a reassessment of the additional duty, which had to be settled before the increase was implemented.

The CAG conducted an audit of leases registered at the district sub-registrar offices in Kendujhar and Jajpur, cross-referencing records with mining plans and production data held by the Deputy Directors of Mines in both Kendujhar and Jajpur Road. The audit revealed that production capacity had risen at all three mines without the necessary reassessment of charges.

The Nuagaon mine was leased to JSW Steel under a state government agreement in June 2020, with an annual production cap of 75,90,258 tonnes. A revised mining plan, approved by the Indian Bureau of Mines in October 2020, increased the maximum capacity to 20 million tonnes annually for the period from 2020-21 to 2024-25.

This increase of 1,24,09,742 tonnes resulted in an uncovered stamp duty and registration fee of Rs 147.76 crore. At Gandhamardan, the capacity rose from 91,15,680 tonnes to 91,20,000 tonnes, marking an increase of 4,320 tonnes.

Similarly, at Kaliapani, the capacity increased from 2,03,860 tonnes to 2,15,000 tonnes, a difference of 11,140 tonnes. The CAG noted that the state government had been made aware of these lapses, yet no corrective measures had been taken by the time the report was published.