CAG Audit Uncovers Major GST Deviations in Ahmedabad
The Comptroller and Auditor General (CAG) has flagged significant Goods and Services Tax (GST) deviations amounting to Rs 2,606.6 crore in a recent audit report for Ahmedabad. The findings point to "deviations from the provisions of the Act" identified during the audit process, raising concerns about compliance and financial oversight.
Key Findings from the Audit Report
The report, covering the period up to March 2024, examined 733 cases of inconsistencies or mismatches between GST returns, input tax credit (ITC) claims, tax payments, and related financial records. Of these, deviations were found in 291 cases, constituting 39.70% of the total. The department accepted or acted on 175 cases involving Rs 749.53 crore, but replies in 116 cases worth Rs 1,858.8 crore were not accepted by the audit. This includes 39 cases where no proper evidence was provided to support the claims.
Irregularities in Registration Cancellations
Further irregularities were identified in the cancellation of GST registrations during 2020-21. In 1,237 cases (24.8%), cancellation orders were issued with delays ranging from one day to 997 days. Additionally, in 4,470 cases (84.4%), registrations were cancelled with effect from a date prior to the date of application, indicating procedural lapses.
Widespread Deviations Across Returns and ITC
The audit of GST returns between 2018-19 and 2020-21 revealed 738 deviations involving a staggering Rs 51.05 lakh crore across returns, ITC, and tax payments. Notably, the report highlighted one data entry error of Rs 50.7 lakh crore while preparing an e-way bill for the movement of goods. Such "very high money values" suggest that "controls to input and validate data in the system are not designed optimally," according to the CAG.
Specific ITC Discrepancies
ITC-related discrepancies were a major focus, with mismatches of Rs 1,555.51 crore between GSTR-2A and GSTR-3B returns, and Rs 559.12 crore between GSTR-2A and GSTR-9 returns. These figures underscore ongoing challenges in reconciling tax credits and ensuring accurate financial reporting under the GST regime.
The CAG report calls for enhanced system controls and stricter adherence to GST provisions to mitigate such deviations in the future.
