Smuggling of petrol into Punjab is creating major loss of revenue to the state government, accused Mr G. S. Chawla, a leading petroleum dealer, at Chandigarh. He announced a reward of Rs 20 lakhs to the person who would help authorities in unearthing petrol smuggling that’s going on with impunity and demanded an inquiry to expose Excise and taxation department-Petrol Mafia nexus. 


The 72-year old Mr Chawla said, “I have received life threats from the concerned petrol dealers and their henchmen for blowing the whistle against this illegal trade. The Government’s move of levying additional taxes on petroleum Products has made petrol cheaper in adjoining states than Punjab. Unscrupulous dealers smuggle lower priced petrol in tankers and sell it at the higher retail price, thus making huge profits and robbing Punjab government of huge revenue.” 

 

Chawla conducted a survey along the border belts of Punjab and discovered that people living adjacent to the fringes of Punjab cross the border and fill their vehicles from the petrol outlets of Haryana and Himachal Pradesh on the border.


The other finding was that for heartland Punjab there are smugglers who fulfill the demand of providing Petroleum Products smuggled in bulk, illegally from Haryana where taxes are lower, thereby making huge profits. 

 

The number of two-wheelers sold in Punjab is 20% higher than those sold in Haryana. Compare this with Petroleum Product sales, Haryana’s growth is 15.9%, Himachal 12.43%, J&K 14.12%, while Punjab is just 4%. 


Punjab’s vehicle growth is more than all these states and yet Petroleum Product growth mismatches it. In this regard it will be pertinent to look back at earlier periods when pricing of Petroleum products in Punjab was at par with other states. During 1991 till 1999-2000, Punjab’s petrol sales was growing at 10% per annum when petrol was not expensive than adjoining states.


In 1999-2000 Haryana sold 234109 Kilo liters (KL) of Petrol compared to Punjab’s 574997 KL and the position in 2014-2015, is that Haryana shows a figure of 10 lakh KL compared to Punjab’s 9 lakh KL.

 

“In last 10 years the population of two wheelers became more than 3 times in Punjab, than Haryana, but who sells more petrol?” Questioned Chawla.


So in a dozen years Haryana with an earlier less than half consumption of Punjab and with lesser number of vehicles has overtaken Punjab. Same is the story in respect of HSD where Haryana figures stand at 5567740 KL compared to Punjab’s 3622855 KL when a decade ago Punjab’s consumption was 60% higher than Haryana. So apart from people getting vehicles filled from adjoining states a large portion of supply is smuggled in which has no record & does not reflect in growth figures , as it is illicit. Also this proves that a heavier tax imposition does not necessarily mean extra revenue in case of petroleum products in Punjab.

 

“However an inexperienced bureaucracy under the leadership of Anurag Verma, who was Excise and Taxation Commissioner when a call was to be taken to implement rate parity, mislead the Dy CM. Verma put up a note in collusion with unscrupulous Petroleum dealers & their associations, that there will be a loss of Rs 400 crore to exchequer if prices are brought down. This halted any move by Dy CM to implement rate parity.” Chawla said.


Adds Chawla, “On the contrary, my study shows that at present taxes on petrol are 36% and if reduced to 26% there will be a loss of just 10%, but the growth will be at least 100 per cent so government revenue will be up 52 per cent instead of just 36 per cent.”


Adds Chawla, “I presented facts to senior political leaders like N K Sharma, Narottam Dev Ratti and Satish Dhanda that ETC was prevailing on Dy CM & wrongly advising him not to reduce the VAT on petrol. The leaders were convinced & impressed upon Dy CM to reduce VAT in Punjab & get the petrol price raised in Delhi and Chandigarh to get it at par with Haryana. When the time came to reduce VAT in Punjab, the mafia hood winked Dy CM in collusion with ETC."  


A S Mongia, President, Mohali Petrol Dealers’ Association & President of Punjab Petrol Dealers Association P S Doaba were the perpetrators and they got a letter made on letter head of Association, on direction of ETC, saying that growth in Punjab after reducing VAT will not be more that 35% and will in effect mean a loss of Rs 400 crores to exchequer. The figures are imaginative & illogical claimed Chawla. He gave an evaluation sheet that proved that growth after rate parity will be 100%.


“The Dy CM was fed with this note and he was not able to reduce rate due to fear of losing the fictitious Rs 400 crores.” Said Chawla

 

Chawla brought to light a recent news in media of a milk tanker carrying smuggled petrol being caught he also narrated an incident to prove petrol smuggling is going on unchecked in Punjab. He shared that on July 1, 2015 he had announced a reward of Rs 5 lakhs for any person getting tankers’ smuggling petrol caught. Immediately a message was flashed by a petrol dealer on a WhatsApp group ‘Save Petroleum trade’, copies of which were given to media where-in it asked members to be alert and vigilant.


“I ask where is the need to be alert when you are not doing anything illegal. This proved that many dealers are indulging in smuggling.” Chawla retorted. The reward announcement proved how smuggling was negatively impacting petrol sales growth. From July 1-7th the growth of petrol sales in Punjab was 67 per cent (the reward was announced on July 1).


“All smuggling stopped for this period & genuine sales grew. I had also shared these developments with Chairman, Punjab Trader Board -- Narotam Dev Ratti. This illicit trade is bleeding Government of Punjab and the honest Petroleum Product dealers. ” Said Chawla.


For more information, please contact:

Mr G S Chawla: 99157-00077 (Leading Petroleum Dealer, Punjab)