Govt grants ‘unauthorised’ tax exemption to industrial units: CAG

Govt grants ‘unauthorised’ tax exemption to industrial units: CAG

SRINAGAR: Jammu and Kashmir government has given “unauthorised” tax exemption of Rs 6.51 crore “unnecessarily” to industrial units, despite these unit holders have not filed returns of their turn over, audit reports say.
The Auditor and Comptroller General (CAG) of India in its annual findings has revealed that the assessing authorities of J&K Commercial Taxes Department had granted irregular tax exemption of Rs 6.51 crore to industrial units who had not filed returns of their turnover and authorized inadmissible exemption of tax of Rs15 lakh on unapproved finished product under the CST Act, besides evading interest of Rs13 lakh leviable on the units.
Commercial Taxes Department has also failed to withdraw the remission of tax of Rs 12.81 crore that was “unnecessarily” granted to many industrial units who had committed offences under the J&K VAT Act, the report said.
“Audit during the course of test-check of assessment records noticed irregularities in 34 cases revealing irregular exemption of tax of Rs 6.51 crore, inadmissible exemption of tax of Rs 0.15 crore and non-levy of tax of Rs 0.12 crore authorized by the assessing authorities,” the CAG document says in its report.
The audit report also says that test-check of records of four circles showed that 32 industrial units had not filled either quarterly or annual returns of their turnover under the CST Act, 1956 during the accounting years 2006-07 to 2009-10 thereby violating the provisions of the government notification.
While finalizing assessment of these industrial units, the assessing authorities had not taken this fact into account and irregularly allowed exemption of tax worth Rs 6.51 crore in favour of these units, the auditor says.
It also says that misclassification of goods under category of higher rate of tax by eight industrial units excess remission of tax of Rs 7.09 crore was granted in their favour by the assessing authorities.
“Assessing authorities had failed to withdraw remission of tax of Rs 12.81 crore granted to 27 industrial units who had committed offences under the J&K VAT Act,” it says.
The report points out that there was slackness in conducting verification of tax remission orders passed by the assessing authorities as only tax remission claims passed up to the year 2009-10 had been verified by internal audit wing of the department.