Shillong, April 17: Mr. Enrico D Pasi president of the Association of Meghalaya Traders and Transporters (AOMTT) has written to the Deputy Commissioner of East Jaintia Hiss District, Khliehriat and to the President of the Jaintia Cement Manufacturers Association Byndihati of East Jaintia Hills District, Meghalaya.
In the letter the President of the AOMTT in the letter has pointed out that there is systemic revenue leakage and evasion of royalty, GST, and statutory cess arising from under-declaration of tonnage in loose-loaded bulker cement and clinker trucks operated by the member of Jaintia Hills Cement Manufacturers Association.
Mr. Enrico President of the AOMTT in the letter stated that on behalf of The Association of Meghalaya Traders and Transporters to place on record our formal objection to a practice that is causing substantial, quantifiable, and recurring loss to the State Exchequer and to the Jaintia Hills Autonomous District Council.
The Revenue Vulnerability Created by Current Dispatch Practice, the transportation of cement and clinker in loose form via multi-axle bulker trucks, rather than in 50kg bags, has created a systemic vulnerability to fiscal evasion.
In the absence of an independent, tamper-proof weighment mechanism at the point of dispatch with real-time oversight by Government authorities, the declared tonnage is susceptible to deliberate understatement, resulting in proportionate evasion of multiple statutory levies for which your member units are liable.
Statutory Revenue Heads Directly Affected, the following dues to the public exchequer are compromised when dispatch tonnage is understated, Goods and Services Tax (GST). GST on cement is chargeable on the weight of the commodity cleared from the factory gate. The prevailing rate stands at 18% with effect from September 2025.
When bulkers are loaded in loose form, the declared weight is frequently based on internal estimates rather than independently verified weighment. An under-declaration of 2–3 tons per vehicle results in non-payment of GST on the concealed quantity, constituting a direct loss to both the State and Central Governments.
District Council Royalty on Major Minerals , Royalty on limestone and clinker is payable to the Jaintia Hills Autonomous District Council on the basis of tonnage extracted and dispatched, as mandated under the MMDR Act, 1957 and applicable JHADC Rules.
Under-reporting of the quantum of clinker moved in bulker trucks enables evasion of royalty computed at the notified rate per tonne, thereby depriving the District Council of revenue lawfully accruing to it.
Mineral Cess, Transport Tax, and District Mineral Foundation Contribution, the State of Meghalaya and the District Council levy Mineral Cess, Transport Tax, and DMF contributions on cement and clinker movement. These levies are computed on a per-tonne basis. Falsification of tonnage in dispatch challans causes a corresponding and automatic evasion of each of these dues.
Quantification of Cumulative Fiscal Loss, the fiscal impact is systemic and not marginal. A conservative estimate of under-declaration of 2–3 tons per trip, applied across 100+ bulker movements per day from plants in this District, equates to 200–300 tons of untaxed material daily. This translates into a cumulative monthly loss amounting to crores of rupees in GST, Royalty, Cess, Transport Tax, and DMF contributions.
Regulatory and Audit Precedent Affirming the Modality of Evasion, this modality of evasion is well documented. Reports of the Comptroller and Auditor General of India’s Report No. 2 of 2019 (Revenue Sector, Government of Meghalaya) for the year ended 31 March 2018, have repeatedly recorded short-realization of mineral royalties in the cement sector.
The mining and geology department failed to act against cement companies, leading to a substantial loss of revenue owing to discrepancies between reported dispatch and actual movement of mineral.
Furthermore, the Directorate General of GST Intelligence in August 2020 has undertaken enforcement actions against major cement manufacturers for maintaining unaccounted supply of cement and clinker, thereby confirming that under-declaration through bulk dispatches is a recognized method of tax evasion.
The President of the AOMTT demand for immediate corrective action, in view of the continuing and substantial loss to the public exchequer and the statutory violations detailed above, the Association of Meghalaya Traders and Transporters hereby calls upon your Association to ensure that all member units.
Institute 100% independent weighment and CCTV surveillance at the factory gate for all bulk dispatches of cement and clinker, with encrypted real-time data access provided to the District Administration, State Tax Department, and the Jaintia Hills Autonomous District Council;
Undertake a voluntary disclosure and reconciliation of production registers, dispatch data, and GST e-way bills for the period January 2025 onwards, and remit all short-paid GST, Royalty, Mineral Cess, Transport Tax, and DMF contributions together with applicable interest and penalty;
Depute an authorized representative to participate in a joint stakeholders’ conference to be convened by the District Administration for notification of a transparent and enforceable dispatch verification protocol;
Please note that failure to initiate corrective measures will compel this Association to seek appropriate administrative and legal remedies for recovery of public dues and enforcement of statutory provisions, and to place this matter before all competent authorities.
Confirm compliance in writing to this Association within fourteen days of receipt of this notice. The President of the AOMTT expect for urgent and responsible action in the interest of statutory compliance and fiscal integrity.
