Government loses Rs. 4500 cr by non-levy or short levy of tax

Audit reportThiruvananthapuram: The Comptroller and Auditor General of India has reported non-levy or short levy of tax and interest amounting to Rs. 4500 crore during year ended March 2015.

In his report on the Revenue Sector submitted to the Assembly, the Comptroller and Auditor General noted that the Commercial Taxes Department had failed to bring majority of dealers under tax net by registering them under the value added tax system.

Though the Economic Census 2013 reported 13.41 lakh establishments, only 2.20 lakh dealers were registered for VAT in the State. Test check by Audit showed non-levy of tax of about Rs. 200 crore including interest and penalty on transactions of un-registered dealers. Rs. 745 crore was lost because of non-adherence to Act and rules while completing assessment.

The system for scrutiny of returns was inadequate. Lack of coordination with other department led to non/short levy of Rs. 117.62 crore. Several assessments were incorrect and resulted in loss of revenue.

Kalyan Jewellers, Kollam, had not paid purchase tax amounting to Rs. 2.31 crore in 2011-13. In the case of Kannan Devan Hills Plantations Company, Munnar; non-finalisation of assessment of agriculture income tax within the stipulated time resulted in escape of income from assessment and consequent loss of Rs. 1.95 crore. The assessing officer allowed more than admissible replantation allowance, resulting in short levy of agriculture income tax by Rs. 1.35 crore.

Audit also found short levy of one-time tax on vehicles by transport officers. Tahasildars had failed to levy building tax in many cases. In seven offices of excise inspectors, directives issued by Excise Commissioner in violation of rules had resulted in loss of Rs. 4.35 crore by way of fine.

Failure to streamline mechanism to levy and collect electricity duty, surcharge and inspection fee had resulted in non/short levy of Rs. 67.61 crore.