New Delhi, Aug 8 : Even after four years of GST’s implementation of GST the effective process of reviewing and auditing of refunds has not been effectively institutionalized so that the department could correct errors in time according to a report issued by the CAG, the auditor for the government CAG said.The report also noted that the audit found the existence of 410 instances of double payments, which amounted to 13.73 crore.Additionally, the audit revealed 1,686 compliance violations in 1,438 cases, which out of 7,560 cases that were reviewed in depth, totalling approximately 977.54 crore, which is an average percentage of deviation of 22 percent.
The irregularities that were discovered were significantly higher in four categories, including ineligible credit of duty-paid goods in inventory without documents irregular claim for credit that is not availed on capital items, credit not eligible for input services or inputs in transportation, and an irregular claims on closing balances.
“Considering that the department verified 79 percent of those claims, the rate of deviation suggests that the verification procedure used by the department was prone to inadequacies.Of a total of 1,438 cases in which audit detected irregularities 1132 cases were confirmed by the department and the department failed to find any irregularities of the sum of 735.69 million,” the report noted.
Audit looked into the information of Public Financial Management System (PFMS) related to GST refunds for the period of July 2017 through September 2019, (Pre-automation) collected from 34 Commissionerates.
They was followed up with an audit of the substance of the process of payment.
It found the existence of 410 instances of double payments due to the absence of monitoring and reconciliation by the Department which amounted to 13.73 crore.13.73 crore, according to the report.
Audit also assessed compliance with the requirements of the CGST Act, associated rules procedures and procedures.
with regard to an evaluative sampling of 12283 refund claims handled by Central Tax Authorities.
“Audit found 522 instances where the excessive or inadmissible amount of the amount of 185.28 crore was approved due to a variety of reasons, including incorrect calculation of Adjusted Total Turnover and consideration of ineligible accumulation of ITC claims, claims that were time-barred , etc.” stated the report.
The CAG audit report found that, even though the department identified the top 50,000 cases to verification as the top prioritization for the 2018-19 year, the process was not yet complete, and the department was still to confirm 8,849 cases.
“The rate of recovering of identified irregularities was very low.Issues with cross-jurisdictional jurisdictions and absence of coordination in Central Tax jurisdictions in certain zones hindered the verification process and the initiation of the recovery process,” said the audit report.
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