CAG pulls up commercial taxes department, cites Rs 1,825 crore irregularities, lack of Internal Audit Wing
Hyderabad: The Comptroller and Auditor General (CAG) pulled up the Department of Commercial Taxes for absence of an Internal Audit wing and pointed out irregularities to a tune of Rs 1,825.12 crore in the last five financial years 2017-18 to 2021- 22.
Commercial Taxes Department is one of the key revenue earning Departments in the Government of Telangana. The Department collects revenue on goods and services under Value Added Tax (VAT),Central Sales Tax (CST) and Goods and Services Tax(GST) and other taxes.
Around 150 crores of tax evasion were found by CAG during its inspection of the records of 40 offices of the Commercial Taxes Department during financial 2021-22. The CAG analyzed the records relating to VAT, CST and GST.
In addition to this, CAG in its report stated that in the last five years it has found a whopping Rs 1,825.12 crores of tax dodging in 4,009 cases. The CAG audit pointed out various tax dodging practices like- non / short levy of tax, non / short realisation of tax, underassessment of tax, loss of revenue, incorrect exemption, concealment / suppression of turnover, application of incorrect rate of tax, incorrect computation and others. Of these, the Department Government accepted Audit observations in 704 cases involving Rs 223.11 crore and were successful in recovering mere Rs 1.98 crore, said CAG in its report.
Absence of Internal Audit
Internal Audit is an important part of internal control mechanism for ensuring proper and effective functioning of a system for detection and prevention of control weaknesses. As per orders issued by the Government of Telangana from time to time, the Department should conduct an internal audit of all Subordinate Controlling Officers or Unit offices at least to the level of district units every year to check all the accounts maintained by them. For this purpose, separate internal audit units should be created in the Department, emphasised CAG.
The Department of Commercial Taxes informed that it did not have an Internal Audit wing. It is recommended that the Government set up an Internal Audit wing in the Commissionerate to evaluate and improve the functions of the Commercial Tax Department, CAG said in its report.
