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Incomplete database of arrears of revenue in Kerala, says CAG audit


Arrears of ₹ 4,933.72 crore in the beginning of 2014-15 has increased to ₹ 11,366.35 crore (130.38%) at the end of 2018-19 in the State

In Kerala, database of arrears of revenue was “incomplete and not properly maintained” in six departments audited by the Comptroller and Auditor General of India (CAG), and arrears of ₹ 4,933.72 crore in the beginning of 2014-15 has increased to ₹11,366.35 crore (130.38%) at the end of 2018-19.

The rate of growth of arrears amount was fluctuating between 13.50% and 22.12% whereas the recovery remained sluggish, with the rate of recovery fluctuating between 4.58% and 9.16% during this period. This has been revealed in the CAG Report on Revenue Sector for the year ending March 2019 and placed on the table of the Kerala Legislative Assembly on Thursday.

Even though 5,06,801 cases (83.30%) involving ₹3,484.97 crore (30.66%) were available for Revenue Recovery (RR), the CAG audit has found that no RR action was requisitioned by the respective departments in these cases to realise arrears.

The total revenue receipts of the Kerala government for 2018-19 amounted to ₹92,854.48 crore against ₹83,020.14 crore for the previous year. As much as 67% of this was raised by the State through tax revenue (₹50,644.11 crore) and non-tax revenue (₹11,783.24 crore). The remaining 33% was receipt from the Government of India as Kerala’s share of divisible Union taxes (₹19,038.17 crore) and grants in-aid (₹11,388.96 crore).

Arrears of revenue as on 31 March 2019 on some principal heads amounted to ₹20,146.39 crore, of which, ₹5,765.84 crore was outstanding for more than five years.

At the end of June 2019, 3,560 Inspection Reports (IRs) issued up to December 2018 in respect of various departments containing 22,437 observations involving a value of ₹8,213.60 crore was outstanding.

Delay in modification of disposed appeal cases resulted in blockage of ₹103.39 crore in 157 cases of State Goods and Service Tax (SGST) Department and ₹1.13 crore in 118 cases of Revenue and Disaster Management (R&DM) Department in the selected districts.

In the Compliance Audit on Transition from Kerala Value Added Tax to Goods and Services Tax, it was found that 61 registered persons in eight tax districts availed themselves of excess transitional credit amounting to ₹46.41 crore over and above the Input Tax Credit.

In the six selected tax districts, 46 persons not having any supporting invoices on goods held in stock on the appointed day but registered under the existing law as manufacturer/service provider claimed transitional credit in respect of stock held, resulting in irregular claim of CGST credit amounting to ₹13.08 crore.

Excess refund of ₹0.57 crore was noticed by the CAG audit in respect of 22 persons in six selected tax districts due to erroneous application of formula.

As many as 2,453 buildings in 28 taluk offices were not assessed to building tax by the tahsildars concerned, even though the village officers had reported these cases in 2016-17 and 2017-18.

In 20 taluk offices, 898 buildings assessed under property tax by local bodies were not identified by the village officers and reported to the tahsildars for assessment under the Building Tax Act/Rules, which resulted in non-levy of building tax to the tune of ₹ 6.72 crore.

Irregular assessments by the assessing authorities due to turnover escaping calculation, application of incorrect rate of tax, irregular exemption and irregular assessment of CST resulted in short levy of tax and interest amounting to ₹6.33 crore.

In 7,671 cases, 1% tax collected at source had not been considered while computing the purchase value of vehicles. This resulted in a short collection of one-time tax levied on non-transport vehicles amounting to ₹3.56 crore.

Short, non-levy of basic land tax amounting to ₹2.37 crore was noticed in 1,162 cases in 28 taluk offices. In respect of vehicles reclassified as non-transport, non-levy of tax was noticed in 434 cases with a money value of ₹0.60 crore and short-levy of tax was noticed in 1,023 cases with a money value of ₹1.22 crore.

The CAG has also pointed out the irregular adjustment made by the department in respect of excess leave salary and pension contribution paid by a licensee resulting in the short recovery of cost of establishment amounting to ₹22.74 lakh.

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