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Rs 1400 crore loss in 2805 tax cases due to assessment/ short levy/ loss of revenue: CAG

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GST News | 18th December 2021:

The Comptroller and Auditor General (CAG) has revealed 2,805 cases of under assessment/ short levy/ loss of revenue, amounting to Rs 1,422.55 crore in a test check of records pertaining to sales tax, Value Added Tax (VAT), excise duty and stamp duty during 2019-20.

The CAG’s report was tabled before the Haryana Legislative Assembly on December 18, 2021.

For sales tax/VAT, the CAG conducted a test check of the records of 34 units, where 53,498 assessment cases were audited. The test check revealed under assessment/ evasion of tax and other irregularities involving Rs 1,388.90 crore in 1,160 cases.

It included Rs 579.20 crore of under assessment of tax, Rs 448.25 crore of irregular or incorrect allowance of Input Tax Credit (ITC) and Rs 138.82 crore of evasion of taxes owing to the suppression of sales or purchases.

Citing cases, the CAG pointed out that the scrutiny of the records between November 2017 and April 2019 revealed that 17 dealers in the office of nine Deputy Excise and Taxation Commissioner (ST), which included Ambala City, Faridabad (North), Faridabad (South), Gurugram (East), Gurugram (West), Hansi, Jhajjar, Panipat and Sirsa, did not show the sales of Rs 47.70 crore, out of total sales worth Rs 122.43 crore in their quarterly/annual returns for the period of 2013-14 to 2016-17.

The Assessment Authorities did not verify the details of the suppression of sales. This resulted in tax evasion of Rs 4.61 crore and penalty of Rs 13.83 crore was also leviable, the CAG said.

Regarding excise duty, the test check of the records of 28 out of 86 units of the State Excise Department highlighted non/short realisation of excise duty/license fee/interest/penalty and other irregularities involving Rs 15.77 crore in 374 cases. On stamp duty, it was found that the test check of the records of 101 out of 143 units of the Revenue Department revealed non/short levy of stamp duty and registration fees, and other irregularities amounting to Rs 17.88 crore in 1,271 cases.

Citing one of the cases, the CAG pointed out the scrutiny of records of the Panipat and Rohtak Sub-Registrars revealed that five collaboration agreements were registered between February and May 2017, on which stamp duty and registration fees of Rs 2.50 lakh was levied. But scrutiny revealed the owners of land had authorised the developers to take possession of the land with the right to construct.


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TaxGyata Team

TaxGyata Team