Hyderabad:
Deputy Chief Minister Bhatti Vikramarka presented the CAG (Comptroller and Auditor General) report on the state’s finances and revenue in the Assembly on Friday. The report revealed significant irregularities in GST (Goods and Services Tax) input tax credit and tax payments by businesses.
The investigation by the CID (Criminal Investigation Department) has already led to a case against former Chief Secretary Somesh Kumar and several top officials from the state Commercial Taxes department. The agency suspects a fraud of Rs 1000 crore in GST collections.
The CAG report highlighted errors in GST and VAT (Value Added Tax) collections, particularly related to Input Tax Credit (ITC) amounting to Rs 7,589 crore. There was a mismatch of Rs 247 crore in input tax credit claimed and tax payments made. Many companies did not file their GST returns, and the Commercial Tax Department officers failed to issue notices. In some cases, companies submitted incorrect calculations in their returns, especially in suburban areas of Hyderabad.
The report also found that GST returns for companies with a turnover of more than Rs 5 crore were calculated inconsistently, revealing 14 types of errors. The CAG mentioned that 124 types of errors were brought to the department’s attention, but no action was taken.
Letters were sent to the department asking for details about tax collection violations, but there has been no response so far. The report identified common issues such as incorrect input tax credit claims, non-submission of returns on time, wrong figures, and non-payment of penalties in many circles in Hyderabad.
Additionally, the CAG found that the state government failed to generate more revenue from the Transport department. Issues included incorrect assessments and refunds of life tax and quarterly tax, non-payment of bilateral and green taxes by vehicle owners, and non-payment of taxes by the Telangana State Road Transport Corporation based on gross traffic earnings. There were also instances of vehicles not renewing their fitness certificates and not installing speed limiting devices.
