Audit Reports

Indirect Tax

Overview

We conducted a performance audit on working of Commissionerates. Divisions and Ranges. Our sample comprised 46 commissionerates, 95 divisions and 204 ranges. We evaluated whether the measures to broaden the sen ice tax base, the monitoring mechanism for registration of assessees, the receipt and scrutiny of returns, the internal audit process, the issue of show cause notices and the review of call book cases were adequate and adhered to by the department.

We were informed by 17 out of 35 test checked commissionerates that they had not carried out the procedures as prescribed by DGST in its action plan for broadening the tax base. We found that different practices were being followed by different commissionerates. We recommended that the Board should issue comprehensive guidelines to remove ambiguities. We also recommended that as a long term measure, the Board may identify sources from where information can be imported electronically into ACES, to form an intelligence gathering system to identify potential taxpayers.

We had identified 1959 service providers in the last five years Performance Audit Reports, who w ere unregistered, but prima facie, were liable to register and pay service tax. We found that the department had verified only 337 and consequently, 151 service providers were made to register. We recommended that the verification and follow up action may be ensured in the remaining cases in a time bound manner.

Download Audit Report

• Report No. 25 of 2011 - Full Report
  _{(0.71 MB) Download}

• Preface
  _{(0.09 MB) Download}
• Executive Summary
  _{(0.06 MB) Download}
• Chapter 1 – Introduction
  _{(0.05 MB) Download}
• Chapter 2 - Broadening of tax base
  _{(0.09 MB) Download}
• Chapter 3 - Registration
  _{(0.24 MB) Download}
• Chapter 4 - Scrutiny of returns
  _{(0.18 MB) Download}
• Chapter 5 - Effectiveness of the internal audit process
  _{(0.12 MB) Download}
• Chapter 6 - Show cause notices and call book cases
  _{(0.12 MB) Download}
• Glossary of terms and abbreviations
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