CAG Report Flags Major GST Discrepancies, Tax Evasion in Telangana

Hyderabad: The Controller and Auditor General report tabled in the Assembly on Friday cited discrepancies and tax evasion of Rs 986.78 crore in GST payments, pointing to possible tax evasion. The report in a way gave credence to the recent allegations on tax evasion raised against former chief secretary Somesh Kumar.

Of the 407 high-value data inconsistencies identified, the department responded to 283 cases. Of these, 109 cases constituted 38.51 per cent of the cases, amounting to Rs 986.78 crore, including mismatches and inconsistencies.

The department has suggested remedial measures before they get time-barred. The CAG added that there was a need to reinforce the institutional mechanism in the field formations to establish and maintain effective oversight on return filing, taxpayer compliance, tax payments, cancellation of registrations and recovery of dues from defaulters.

The CAG asked the department to consider introducing additional validation controls in GST returns to improve tax payer compliance and to facilitate scrutiny of returns.

In the revenue department, the CAG report found 24 violations to the tune of Rs 129.39 crore. They include levying five per cent tax levied instead of 14.5 per cent on the sale of mobile phones. With regard to state excise duties it showed there was a non-levy or short levy of penalty for the delayed payment of annual distillery excise tax amounting to Rs 86.99 lakh. The evasion was by 46 bar and restaurants amounting to Rs 71 lakh and one district prohibition and excise office amounting to Rs 24 lakh.

Evasion in the stamps and registration fee included undervaluation of properties by applying rates applicable to agricultural land which had already been converted for non-agricultural purposes and approved by the revenue authorities, the CAG report stated.

In the matter of motor vehicles tax, the CAG report said that though a major portion of the tax revenue was collected online and through MeeSeva, reconciliation of receipts was not effective as reports were not generated in the unit offices and there was a variation between MeeSeva receipts and remittances to the department.

With regard to land revenue, the CAG said that lower regularisation fee was levied due to incorrect classification of nature of possession and incorrect adoption of market value of the land.