Adani Group Accused of Evading ₹1,000 Crore Taxes in Diamond & Jewellery Trade

Last Modified: Mon Jan 16 2017 15:05:16 GMT+0530 (India Standard Time)
  • 10 years
    + that Directorate of Revenue Intelligence (DRI) has been investigating how a clutch of companies in the Adani Group led by Gautam Adani allegedly evaded taxes and laundered money while trading in cut and polished diamonds and gold jewellery.
  • Rs. 1,000 crore
    Amount in tax evasion and money laundering, according to the DRI's allegation, by Adani Enterprises Limited (AEL) and several corporate entities that were directly or indirectly controlled by, or associated with it . AEL is part of the Adani group.
  • 2003-04
    Duty Free Credit Entitlement (DFCE) scheme and Target Plus Scheme (TPS) announced meant to incentivise exports. Exporters could receive financial benefits if their exports in a given year exceeded by a certain percentage of the previous financial year.
  • Rs. 377 crore
    export turnover of AEL in 2002-03 through export of various commodities from food grains to textiles.
  • Rs. 4,657 crore
    export turnover of AEL in 2003-04.
  • Rs. 10,808 crore
    export turnover of AEL in 2004-05. The exponential increase over the 2 year period was in large part due to exports of gold jewellery and rough diamonds, both items being part of the DFCE and TPS schemes.
  • Rs. 2,605 crore
    export turnover of AEL in 2005-06. The sudden fall as explained by the DRI is due to the withdrawal of both the DFCE and TPS schemes.
  • 80%
    of both exports and imports during these 2 years were between 8 and 7 companies respectively, according to DRI's investigations. Owners of these companies were in some cases the same set of individuals, clearly suggesting circular trading. According to the DRI, goods imported were often exported out of India on the same day!
  • 5% to 10%
    increase in price of items that were imported and then exported after "value addition". According to DRI the "value addition" almost always amounted to boiling, sieving and assortment of diamonds and thus the export value was artificially inflated.
  • 59,500 kgs
    of studded jewellery valued at over ₹3,843 crore ($861.40 million) exported by AEL and its associates over 9 months (Sep 2004 to Feb 2005). DRI alleges circular trading with gold bars imported from UAE into India, export of crude studded jewellery from India back to UAE, which was then melted down and imported back to India to begin another cycle. All companies involved in this round tripping are shown by DRI to belong to the Adani group.
  • Rs. 1,000 crore
    Approximate amount of benefit claimed by AEL as per provisions of the 2 schemes, which the DRI has contested and wants rejected based on its allegation of circular trading and artificial price inflation.