CAG Report Highlights ₹755.49 Crore Revenue Loss Under GST by Commercial Tax Department
Key Findings
1. Underassessment and Revenue Loss
The CAG Report No. 7 of 2024, covering the period ending March 2022, identified revenue losses amounting to ₹755.49 crore in the Commercial Tax Department related to GST. Specifically, the report highlighted significant lapses uncovered during the 2021-22 compliance audit.
The audit findings were based on:
- Test checks of 418 cases under centralized audit.
- Examinations of 61 cases under detailed audit.
- Audits of 10 LGTSTOs under range audits.
These lapses demonstrate the urgent need for improved assessment and monitoring mechanisms.
2. Department Response and Recovery
In response, the department acknowledged underassessment and other deficiencies in 46 cases. However, it has managed to recover only ₹2.64 crore so far, which highlights a gap between acknowledgment and action.
3. Stamps and Registration Department Observations
The report also flagged revenue losses of ₹193.08 crore within the Department of Stamps and Registration across 143 paragraphs. Notably, only ₹4.84 crore has been recovered so far, representing a mere 5.08% of the accepted cases. This significant shortfall in recovery underscores the need for more aggressive efforts.
Recommendations by the CAG
1. Improve Recovery Rates
To reduce the revenue gap, immediate steps are essential to pursue outstanding dues in accepted cases. This is particularly critical for the Department of Stamps and Registration, where the recovery rate remains alarmingly low.
2. Address Systemic Deficiencies
The Commercial Tax Department must focus on strengthening compliance and audit processes to prevent recurring revenue losses. Furthermore, streamlining workflows and implementing accountability measures could greatly reduce inefficiencies.
3. Enhanced Oversight
The CAG also recommends developing a detailed action plan. This plan should aim to recover pending dues swiftly while addressing key findings from the audit to mitigate future losses.
Implications for Stakeholders
The findings underscore the importance of better enforcement of GST provisions and enhanced accountability within the Commercial Tax Department.
- For businesses: Ensuring compliance with GST regulations is essential to avoid audits, penalties, and reputational risks.
- For government departments: Implementing the CAG’s recommendations could help safeguard revenues and restore public trust.
