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The Comptroller and Auditor General has criticised the J&K Government for systemic deficiencies that resulted in under-recovery of Rs 1,211 crore tax money due to inadequate planning and non-compliance with the extant procedures and rules.
“The arrears as on March 31, 2009, in respect of some principal heads of revenue as by the department (Finance Department) was Rs 1,211.70 crore,” the CAG Report for the year ended March 31, 2010, revealed here.
Ticking off the State Government, the report further said out of the total arrears, Rs 650.52 crore was outstanding for more than five years.
The CAG report, which was tabled in the J&K Assembly recently, said out of the total tax arrears, Rs 1,153.66 crore was outstanding against businessmen, traders and various other organisations on account of sales tax and VAT.
Similarly, Rs 4.77 crore was outstanding arrears on account of state excise taxes, Rs 28.06 crore as passenger tax, Rs 24.25 as toll tax, Rs 0.21 crore as entertainment tax and Rs 0.75 crore as motor spirit tax, it said.
The CAG, in its 2010 report, expressed surprise over the observation of the Government that specific action in respect of the remaining arrears of Rs 657.88 crore in the sales tax sector had not been initiated by the Finance Department as of October, 2009.
Of the total Rs 735.07 crore worth of sales tax arrears on March 31, 2009, the recovery of Rs 76.78 crore was stayed by the courts/appellate authority, the CAG report said.
The CAG report further said that tax collection was not smooth and suffered deficiencies liked inadequate planning, non-reorganisation of the administrative machinery, shortage of staff and non-computerisation.
There were systemic deficiencies that affected the efficiency and effectiveness of the assessment and collection of toll tax, it said, adding there was very poor internal control and it was not satisfactory.
The CAG recommended a speedy recovery drive and direction to Jammu and Kashmir Bank for timely remittance of revenue into the government account. In case of delays, the CAG called for charging interest from the bank in lieu of the late remittance.
It also recommended monitoring and identification of dealers and business houses that have failed to pay their taxes and cancel their registration in case of their failure to pay the arrears.
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