Officials of UP State Bridge Corporation (UPSBC) were found to have benefited some private companies by clearing excess Goods and Services Tax (GST) resulting in loss of crores of rupees to the department.
Interestingly, after irregularities were detected, the department completed the formality of issuing notice to the companies asking them to return the excess money paid but had not taken any step to recover the losses.
Some senior officer when contacted, claimed that the introduction of GST exposed the irregularity in the department so the government must probe taxes paid earlier to suppliers to ensure whether this practice of making excess payment as taxes was also going on earlier or not.
Sources in UPSBC confirmed that Rate Contract (RC) for supply of material to the department (like steel and cement etc) were fixed last year for 2017-18 fiscal and three companies –Jindal Steel and Power limited, Himalaya Fibertech Cement Private limited and Electrosteels Steel limited were listed as suppliers.
The price quoted in this RC also included 18 per cent GST for material as well for freight. The RC was finalised by the then Deputy Project Manager (Procurement) Sanjay Srivastava. later, the UPSBC made payment as per the RC. Interestingly, while finalising the RC, Srivastava did not bother to check that 18 per cent GST for the freight was not correct as the government had fixed it at 5 per cent.
Thus from July 17 when the GST was imposed, till date, the UPSBC made excess payment of Rs 283 per ton of steel supply.
Sources in UPSBC confirmed that the audit of the department made by chartered accountant pointed the irregularity but officers concerned remained silent.
Not only this, when the department filed GST, it the latter also wrote back to the UPSBC asking how 18 per cent GST was charged for freight when it was only 5 per cent. Even then, the matter was not taken upseriously.
It was only on May 22 last , when Sandeep Gupta, who took over as Deputy Project Manager (Procurement) from Sanjay Srivastava, that he wrote to the three companies asking Himalaya Fibertech Cement Private limited to refund excess of Rs 25 lakh paid as GST, over Rs 30 lakh recovery notice was sent to Electrosteel’s while a similar notice of Rs 30 lakh was issued to Jindal Steels.
A senior officer claimed that though recovery notice of over Rs 85 lakh were issued by the department, the loss was much more and could run into several crores of rupees as about 40,000 tonnes of steel was purchased by the department every year and the department paid 13 per cent extra GST on the supply.
"Over a month has elapsed when the notices were issued, but the companies have not responded. What is surprising is that even when the companies were not refunding the excess money, the department continued to take supply from them," the officer pointed out.