Audit Report 2007 Govt. of Orissa Revenue Receipts

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Audit Report 2007 Govt. of Orissa Revenue Receipts

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REPORT OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA FOR THE YEAR ENDED 31 MARCH 2007 REVENUE RECEIPTS GOVERNMENT OF ORISSA REPORT OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA FOR THE YEAR ENDED 31 MARCH 2007 (REVENUE RECEIPTS) GOVERNMENT OF ORISSA www.cag.gov.in TABLE OF CONTENTS Reference to Paragraph Page Preface -- 4 v Overview -- 4 vii to x CHAPTER-I: GENERAL Trend of revenue 1.1 1 4 Variations between the budget estimates and 4 1.2 4 actuals Analysis of collection 1.3 5 4 Cost of collection 1.4 5 4 Analysis of arrears of revenue 1.5 6 4 Arrears in assessments 1.6 8 4 Evasion of tax 1.7 9 4 Results of audit 1.8 9 4 Failure to enforce accountability and protect 4 1.9 10 interest of the Government Departmental audit committee meetings 1.10 11 4 Response of the departments to draft audit 4 1.11 11 paragraphs Follow up on audit reports-summarised position 1.12 12 4 Compliance with audit reports 1.13 14 4 CHAPTER-II : SALES TAX AND ENTRY TAX Results of audit 2.1 15 4 IT audit of “Value Added Tax Information 4 2.2 16 System” in Commercial Tax Department Sales Tax Under assessment of tax due to short 4 2.3 27 determination of taxable turnover Non-levy of tax on royalty 2.4 27 4 Irregular grant of exempted sale 2.5 28 4 Irregular grant of exemption 2.6 29 4 i Reference to Paragraph Page ...

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REPORT OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA FOR THE YEAR ENDED 31 MARCH 2007 REVENUE RECEIPTS GOVERNMENT OF ORISSA

REPORT OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA

FOR THE YEAR ENDED 31 MARCH 2007

www.cag.gov.in

(REVENUE RECEIPTS)

GOVERNMENT OF ORISSA

1.2

1.3

1.6

1.7

1.4

1.5

1.1

Reference to

TABLE OF CONTENTS

2.4 2.5 2.6

27 28 29

      

Analysis of collection Cost of collection Analysis of arrears of revenue Arrears in assessments Evasion of tax Results of audit Failure to enforce accountability and protect interest of the ent Governm

 

Trend of revenue Variations between the budget estimates and actuals

1.10

1.11

1.12

1.13

Results of audit IT audit of “Value Added Tax Information System in Commercial Tax Department

CHAPTER-II : SALES TAX AND ENTRY TAX

Follow up on audit reports-summarised position Compliance with audit reports

 

Departmental audit committee meetings Response of the departments to draft audit paragraphs

2.3

1.8

Page

Paragraph

vii to x



Overview

Preface

2.1

CHAPTER-I: GENERAL

1.9

2.2

 

Sales Tax

Under assessment of tax due to short determination of taxable turnover Non-levy of tax on royalty Irregular grant of exempted sale Irregular grant of exemption

   



      

Irregular exemption on export sales Under assessment of tax due to misclassification of goods Excess grant of exemption Non-levy of tax on lease rental Under assessment of tax due to allowance of irregular transit sale Under assessment of tax due to non-inclusion of entry tax in the taxable turnover Under assessment due to application of lower rate of tax Short levy of tax due to incorrect classification of supply contract as works contract

Entry Tax

 of entry tax Loss/non-realisation Under assessment of entry tax  Under assessment of entry tax due to short determination of taxable turnover

      

 

Reference to

Paragraph 2.7

2.8

2.9 2.10

2.11

2.12

2.13

2.14

2.15 2.16

2.17

CHAPTER-III : TAXES ON MOTOR VEHICLES

Results of audit Misappropriation of Government revenue Non/short realisation of motor vehicles tax and additional tax Non/short realisation of fees Loss/non-realisation of compounding fees from goods vehicles carrying excess load Non-realisation of composite tax for goods vehicles under reciprocal agreement Non/short levy of penalty on belated payment of motor vehicles tax and additional tax Non/short realisation of tax from stage carriages plying without permits Non-realisation of differential tax from stage carriages used as contract carriages

3.1 3.2 3.3

3.4 3.5

3.6

3.7

3.8

3.9

Page 29

30 31

34 35

37 38

5.5

4.5

5.4

     

5.3

3.10

4.4

5.1

5.2

Results of audit Non-realisation of excise duty due to short lifting of IMFL/beer Non-raising of demand for operation of brewery beyond the prescribed time limit Short realisation of label registration fee Non-realisation of utilisation fee for short utilisation of molasses Short realisation of transport fee onmahua flower

CHAPTER-V: STATE EXCISE

4.2 4.3

4.6

Stamp Duty and Registration Fees

g of cess Short raisin demand for Short realisation of premium on conversion of agricultural land for non-agricultural purpose Short realisation of revenue

 

Short levy of stamp duty and registration fee Short realisation of stamp duty and registration fee

3.11

3.15

3.13 3.14

3.12

   

Non-realisation of motor vehicles tax/additional tax for violation of off road declaration Non-realisation of trade certificate tax/fees Short realisation of one time tax Short realisation of reservation fees on allotment of reserved registration numbers

Non/short realisation of motor vehicles tax/additional tax from stage carriages plying under reciprocal agreement on inter State routes Short realisation of composite tax under the National Permit Scheme

 

Land Revenue



CHAPTER- IV: LAND REVENUE, STAMP DUTY AND REGISTRATION FEES

Results of audit

45 45

Reference to

Page

Paragraph

iii

5.6

4.1

Reference to

Paragraph CHAPTER-VI: FOREST AND MINING RECEIPTS  6.1Results of audit Forest Receipts  6.2 of timber and poles Non-disposal r be3 6.or ftlayno ymit elated Np anyomle-nvte oyfoi tnrese tnob Minin Recei ts tl y.6 4o foraylisation non-reales rntutog inadi kcots er eht nccourt ag ofntinS oh  Short levy of royalty on high grade iron ore 6.5  Non-levy of interest on delayed payment of 6.6 mining dues

7.2

Page

 61 6.7 of royalty on coal damaged by fire Non-levy CHAPTER-VII : OTHER DEPARTMENTAL RECEIPTS  63Results of audit 7.1  of "Levy and collection of electricity Review duty"  Non-realisation of dues relating to the State Guest House

7.3 78

PREFACE This report for the year ended 31 March 2007 has be en prepared for submission to the Governor under Article 151(2) of the Constitution.

The audit of revenue receipts of the State Governme nt is conducted under Section 16 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971. This Report presents the results of audit of receipts comprising sales tax, taxes on motor vehicles, land revenue, stamp duty and registration fees, state excise, forest re ceipts, mining receipts and other departmental receipts of the State.

The cases mentioned in this report are among those which came to notice in the course of test audit of records during 2006-07 as well as those noticed in earlier years but which could not be covered in the previous years’ reports.

General

OVERVIEW

This report contains 48 paragraphs including two reviews pointing out non-levy or short levy of tax, interest, penalty, revenue foregone, etc., involving Rs. 516.32 crore. Some of the major findings are mentioned below:

The Government's total revenue receipts for the year 2006-07 amounted* to Rs. 18,033 crore against Rs. 14,085 crore in the previous year. Of this, 47.98per cent raised by the State through tax revenue (Rs. 6 ,065 was crore) and non-tax revenue (Rs. 2,588 crore). The balance 52.02per cent was received from the Government of India in the form of State's share of divisible Union taxes (Rs. 6,220 crore) and grants- in-aid (Rs. 3,159 crore). {Paragraph 1.1}

Test check of the records of sales tax, motor vehicles tax, land revenue, state excise, forest, mines and minerals and other departmental offices conducted during the year 2006-07 revealed under as sessment/short levy/loss of revenue etc., amounting to Rs. 1,160.66 crore in 2,38,540 cases. During the year 2006-07, the concerned depar tments accepted under assessment and other deficiencies of Rs. 189.97 crore involved in 87,114 cases which were pointed out in 2006-07 and earlier years. Of these, the departments recovered Rs. 25.26 crore in 15,428 cases. {Paragraph 1.8}

As on 30 June 2007, 3,368 inspection reports issued upto December 2006 containing 9,772 audit observations involving Rs. 2,576.21 crore were outstanding for want of comments/final action by th e concerned departments. {Paragraph 1.9}

Sales Tax

Information technology audit of “Value Added Tax Information System in the Commercial Tax Department revealed the following:

System design deficiencies resulted in non-capturing of purchase details, incorrect entry of carry forward and refundable amount etc. {Paragraph 2.2.7}

* Chapter-I figures in overview have been rounded off to nearest crore.

vii

Audit Report (Revenue Receipts) for the year ended 31 March 2007

Non-integration of modules resulted in utilisation of waybill other than the dealer to whom it was issued and before its issue date. {Paragraph 2.2.8}

Lack of input controls led to incomplete and inaccurate database like issue of multiple registration numbers to the same dealer, entry of invalid vehicle number and waybill number, wrong entry of t ax payable/due, non-entry of dealer details etc. {Paragraph 2.2.9}

Absence of validation controls led to inaccuracies in the database like entry of refund claim without export, acceptance of payment after filing of return, exit of vehicle at the entry check gate, acceptance of unusual time to exit the border check gate, repeated utilisation of waybill etc. {Paragraph 2.2.11}

Lack of adequate security controls resulted in multiple users having the same password, unauthorised data entry and modification of data etc.

{Paragraph 2.2.12}

A Government of Orissa undertaking did not disclose the royalty of Rs. 27.36 crore received for use of its trade mark resulting in non-levy of tax of Rs. 8.54 crore including penalty. {Paragraph 2.4}

An industrial unit covered under package scheme of incentives under the industrial policy was irregularly allowed tax exemption of Rs. 3.22 crore, though eligibility certificate was not issued by the competent authority. {Paragraph 2.6}

A manufacturer of cast iron castings was irregularl y allowed tax exemption of Rs. 2.47 crore on export though the go ods were not exported in the same form. {Paragraph 2.7}

Sale of perfumed oil worth Rs. 7.58 crore was incorrectly taxed at a lower rate resulting in short levy of tax of Rs. 1.40 crore. {Paragraph 2.8}

viii

III

Motor Vehicles Tax

Overview

In Regional Transport Offices, Jharsugda and Keonjhar, Rs. 21.08 lakh was misappropriated through manipulation and false endorsement in the records. {Paragraph 3.2}

Motor vehicles tax and additional tax including pen alty amounting to Rs. 52.65 crore was not realised in respect of 26,319 vehicles. {Paragraph 3.3}

Non-realisation of various fees at the revised rate s led to loss of Rs. 1.69 crore in 1.45 lakh cases during the period from April 2005 to March 2006. {Paragraph 3.4}

Revenue, Stamp Duty and Registration FeesLand

Short raising of demand towards cess against two organisations resulted in short realisation of Rs. 59.23 lakh. {Paragraph 4.2}

Short realisation of premium of Rs. 36.95 lakh on c onversion of agricultural land for non-agricultural use in respect of 280 cases. {Paragraph 4.3}

An industrial unit escaped stamp duty, town-plannin g charges and registration fees of Rs. 280.80 crore on the sale a nd transfer of its fertiliser complex. {Paragraph 4.5} Short realisation of stamp duty and registration f ee of Rs. 24.36 lakh in 84 documents due to non-consideration of highest sale value of similar classification of land. {Paragraph 4.6}

State Excise

Excise duty of Rs. 44.09 lakh towards short lifting of IMFL/beer was not realised by the department.

{Paragraph 5.2}