Comptroller & Auditor General Flags Gaps In CBIC Oversight, Crippling GST Audits

New Delhi: The CAG on Thursday flagged a "persistent shortage" of manpower in the audit formations of the Central Board of Indirect Taxes and Customs (CBIC) and said this was leading to gaps between units audited and units planned for internal audit. The Comptroller and Auditor General (CAG) in its report on the Department of Revenue (Indirect Taxes, GST) for the period ended March 2023 said that in the era of the self-assessed tax regime, internal audit is one of the main tools for ensuring compliance by the taxpayers.

As of July 1, 2024, 38 per cent of positions in the Audit Formations of the CBIC were vacant. As a result, there is no significant increase (marginal increase of 4 per cent) in the number of units selected for internal audit during FY'23 over FY'22, the CAG said. It said that departmental action against non-compliant taxpayers is a time-bound activity under the Goods and Services Tax (GST) Act. In view of this, Ministry may take further action to increase the manpower in the CBIC audit formations tothe optimum level, the CAG said.

The number of units audited during FY'21, FY'22 and FY '23 were 26 per cent, 48 per cent and 70 per cent, respectively, of the total units planned. Although there had been an increasing trend in the percentage of units audited vis-à-vis units planned from FY'21 to FY'23, there is still a gap between the numbers of units planned and audited, the CAG said. The percentage of total recovery marginally increases to 18 per cent in FY'23 from 17 per cent in FY'22. However, it remained below as compared to FY'21 (21 per cent) of the total short levy detected, the CAG said.

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