Seizure notice for Anil Ambani's aircraft

Tightening the noose on corporate India for alleged customs duty evasion, the government has issued a notice to seize an aircraft belonging to Anil Ambani group, sources familiar with the development said.

Th eAnil Ambani Group has offered a bank guarantee and indemnity bond for the aircraft, but the Customs officials have that said that it is not possible without the seizure notice.

Earlier, the air intelligence unit (AIU) of the customs department at Mumbai airport had seized and sealed two aircraft -- a Falcon 900 Ex and an Airbus 319 -- belonging to Mukesh Ambani's Reliance Industries Limited for non-payment of duty.

Mukesh Ambani had gifted the A-319 luxury jet to wife Nita on her 44th birthday less than a year ago.

Nearly 30 Indian firms that have imported aircraft for charter use are under the scanner of the Customs authorities for allegedly flouting import norms in order to evade taxes.

The Customs authorities issued notices to these chartered aircraft owners. It is alleged that companies have imported aircraft under the category of "non-scheduled (charter) services" to provide commercial aircraft services, but have diverted them for personal use. Charter imports are virtually duty-free.

However, if the aircraft is meant for personal use, then it attracts a higher incidence of Customs duty at around 21.6 per cent.

It is alleged that industrial groups such as Reliance Industries, GMR, DLF and Taj Air, among others have misdeclared their intention with regard to end-use of these aircraft, by importing them at zero duty for charter use, but ended up utilising them for personal use.

Assuming that 15 aircraft are found to be guilty of this violation, then the duty evasion can be estimated to the extent Rs 324 crore (Rs 3.24 billion) assuming the price of an average business aircraft at Rs 100 crore (Rs 1 billion). Chartered aircraft cost between Rs 65 crore (Rs 650 million) and Rs 107 crore (Rs 1.07 billion), say aviation industry sources.

The notices followed a survey by the Customs authorities, which found that the rules have been flouted. The show-cause notices are a result of this.

Officials said they expect to recover significant amount of revenues from the evaders.

As reported earlier, a Reliance Industries Group firm was asked by the Customs authorities to pay Rs 57.42 crore (Rs 574.2 million) for evading taxes and its two charter aircraft were briefly seized.

RIL has said, "The authorities concerned as a matter of routine procedure have sent out notices to several non-scheduled operators. We are fully complying with all procedures as notified by the authorities.''

"If need be we are prepared to submit details of charter operations to the Customs authorities," a GMR executive said, confirming that it has also received a notice.

Additional inputs: Business Standard