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CAG detects anomalies in sales tax data

By Staff Reporter

GUWAHATI, March 2 � An Information Technology Audit of Taxation Information Management System (TIMS) of the State Government conducted by the Comptroller and Auditor General (CAG) of India for the financial year 2008-09 found that lack of input check resulted in a huge difference of Rs 91,27,460.16 crore in comparison with the manual records.

The CAG report also said that the Sales Tax Department irregularly allowed exemption of tax of Rs 1,026 crore on tax paid sales without any supporting documents in matters of VAT implementation.

The CAG report of Revenue Receipts of the State Government for the period, tabled in the State Assembly today, stated that the cross verification of annual returns maintained in the case filed with the data of the tables relating to seven dealers, who received consignment from outside the State, revealed the above discrepancy.

The TIMS system captures detailed information about the commodities in each consignment crossing the Check Post. These information are used for verification of figures included in the respective returns submitted by a dealer, said the CAG report.

The dealers named in the report are � M/s Saraf Glass Agency (a difference of Rs 354.29 crore), M/s Harnam Motors Co (Rs 121.97 crore), M/s Plylam Distributor (Rs 70514.06 crore), M/s Sanitary Centre (Rs 90,53,849.66 crore), M/s Canteen Stores (Rs 608.58 crore), M/s Anil Agency (Rs 809.77 crore) and M/s Samsung India (Rs 1201.83 crore).

The CAG report said that the lack of input control thus resulted in entry of unrealistic data into the system. The Sales Tax Department stated in March, 2009 that necessary corrections had been made in TIMS and steps are being taken to prevent absurd data entry.

�However, the manner in which the corrections were made in the database was not intimated to audit,� said the CAG report.

It further stated that non-implementation of the major portion of the modules (10 out of 18) even after five years of commissioning the TIMS, rendered the whole project ineffective and the lack of cross verification with TIMS data resulted in loss of Rs 1.42 crore.

VAT: the CAG report said that a review on transition from sales tax to Value Added Tax (VAT) registered a decrease of 9.66 per cent as compared to the pre-VAT period. Also, there was negative growth of revenue during consecutive three years from 2005-06 to 2007-08 fiscals.

It further stated that the compensation claim of Rs 278.65 crore preferred by the State Government during 2006-07 and 2007-08 was inadmissible. Moreover, non-detection of application of lower rate of tax resulted in leakage of revenue of Rs 1.29 crore.

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CAG detects anomalies in sales tax data

GUWAHATI, March 2 � An Information Technology Audit of Taxation Information Management System (TIMS) of the State Government conducted by the Comptroller and Auditor General (CAG) of India for the financial year 2008-09 found that lack of input check resulted in a huge difference of Rs 91,27,460.16 crore in comparison with the manual records.

The CAG report also said that the Sales Tax Department irregularly allowed exemption of tax of Rs 1,026 crore on tax paid sales without any supporting documents in matters of VAT implementation.

The CAG report of Revenue Receipts of the State Government for the period, tabled in the State Assembly today, stated that the cross verification of annual returns maintained in the case filed with the data of the tables relating to seven dealers, who received consignment from outside the State, revealed the above discrepancy.

The TIMS system captures detailed information about the commodities in each consignment crossing the Check Post. These information are used for verification of figures included in the respective returns submitted by a dealer, said the CAG report.

The dealers named in the report are � M/s Saraf Glass Agency (a difference of Rs 354.29 crore), M/s Harnam Motors Co (Rs 121.97 crore), M/s Plylam Distributor (Rs 70514.06 crore), M/s Sanitary Centre (Rs 90,53,849.66 crore), M/s Canteen Stores (Rs 608.58 crore), M/s Anil Agency (Rs 809.77 crore) and M/s Samsung India (Rs 1201.83 crore).

The CAG report said that the lack of input control thus resulted in entry of unrealistic data into the system. The Sales Tax Department stated in March, 2009 that necessary corrections had been made in TIMS and steps are being taken to prevent absurd data entry.

�However, the manner in which the corrections were made in the database was not intimated to audit,� said the CAG report.

It further stated that non-implementation of the major portion of the modules (10 out of 18) even after five years of commissioning the TIMS, rendered the whole project ineffective and the lack of cross verification with TIMS data resulted in loss of Rs 1.42 crore.

VAT: the CAG report said that a review on transition from sales tax to Value Added Tax (VAT) registered a decrease of 9.66 per cent as compared to the pre-VAT period. Also, there was negative growth of revenue during consecutive three years from 2005-06 to 2007-08 fiscals.

It further stated that the compensation claim of Rs 278.65 crore preferred by the State Government during 2006-07 and 2007-08 was inadmissible. Moreover, non-detection of application of lower rate of tax resulted in leakage of revenue of Rs 1.29 crore.